Sales tax deduction for resale transactions depends on statutory conditions, not buyer's declaration; State cross-objection was maintainable.

Deduction under section 5(2)(a)(ii) of the Orissa Sales Tax Act depended on the statutory conditions that the sale was by a registered seller to a registered buyer whose certificate showed resale in Orissa, and it was not defeated merely because the buyer did not furnish the declaration under rule 27(2). The assessee was therefore entitled to the deduction. On the appellate issue, the later amendment to the Act and its transitory provisions conferred cross-objection rights in second appeal proceedings before the Tribunal, so the State's cross-objection was maintainable. The reference was answered in the affirmative on both questions.

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Issues: (i) Whether sales of goods to a registered dealer whose certificate showed resale in Orissa were deductible from the seller's taxable turnover under section 5(2)(a)(ii) of the Orissa Sales Tax Act despite absence of a declaration under rule 27(2) of the Orissa Sales Tax Rules, 1947; (ii) Whether the State's cross-objection before the Tribunal was maintainable.

Issue (i): Whether sales of goods to a registered dealer whose certificate showed resale in Orissa were deductible from the seller's taxable turnover under section 5(2)(a)(ii) of the Orissa Sales Tax Act despite absence of a declaration under rule 27(2) of the Orissa Sales Tax Rules, 1947.

Analysis: The deduction depended on the substantive conditions in the proviso to section 5(2)(a)(ii), namely, sale by a registered seller to a registered buyer whose certificate specified resale in Orissa. The earlier decision governing the same statutory provision held that the benefit of deduction followed from satisfaction of those conditions and was not dependent on the purchasing dealer furnishing a declaration under rule 27(2).

Conclusion: The assessee was entitled to the deduction, and the assessing officer was not wrong in allowing it.

Issue (ii): Whether the State's cross-objection before the Tribunal was maintainable.

Analysis: The later amendment to the Orissa Sales Tax Act and its transitory provisions conferred appellate and cross-objection rights in second appeal proceedings before the Tribunal, and the earlier decision had already held that a State cross-objection in such circumstances was legally maintainable.

Conclusion: The Tribunal was right in entertaining the cross-objection.

Final Conclusion: The reference was answered in the affirmative on both questions, leaving the assessee successful on the deduction issue but unsuccessful on the challenge to the State's cross-objection.

Ratio Decidendi: Under section 5(2)(a)(ii), the seller's deduction turns on the statutory conditions for sale to a registered dealer for resale in Orissa and is not defeated merely because the buyer did not furnish a declaration under rule 27(2); cross-objection rights under the amended appellate scheme are maintainable where conferred by the statute and its transitory provisions.

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