TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the royalty paid under the forest lease formed part of the purchase price and purchase turnover of tamarind, so as to justify reassessment under section 12(8) of the Orissa Sales Tax Act, 1947; (ii) Whether the reassessment notice was vitiated for non-communication in writing of the reasons for reopening.
Issue (i): Whether the royalty paid under the forest lease formed part of the purchase price and purchase turnover of tamarind, so as to justify reassessment under section 12(8) of the Orissa Sales Tax Act, 1947.
Analysis: The forest contract showed that the State Government was the seller and the assessee was the buyer. On payment of the consideration to the Government, the assessee acquired the exclusive right to procure tamarind from the leased area, and the seller did not do anything further in relation to procurement. Under section 2(ee), purchase price means the valuable consideration payable for the goods, and under section 2(j) purchase turnover is the aggregate of purchase prices. The royalty paid to the Government was therefore the purchase price, while later expenses of collection or transportation incurred by the assessee could not be added to it. The facts were distinguishable from the case relied on by the revenue, where the dealer had purchased from primary collectors.
Conclusion: The royalty paid to the Government was part of the purchase price and purchase turnover, and the assessee's treatment of it was correct.
Issue (ii): Whether the reassessment notice was vitiated for non-communication in writing of the reasons for reopening.
Analysis: Before invoking section 12(8), the assessing officer must record reasons indicating a prima facie basis for reassessment. However, the record showed that the assessee was informed of the ground for reopening when it appeared before the assessing officer, namely the audit objection regarding inclusion of procurement and transportation charges. The requirement of communication was thus substantially met, and absence of a separate written intimation did not invalidate the proceeding on this ground.
Conclusion: The reassessment notice was not invalid merely because the reasons were not separately communicated in writing.
Final Conclusion: The challenge to the reassessment notice succeeded on the first ground, and the impugned notice was quashed.
Ratio Decidendi: Under a forest lease, the consideration paid to the State for the exclusive right to procure forest produce is the purchase price and purchase turnover, while post-purchase collection or transport expenses are not part of it; reassessment must rest on a recorded prima facie basis.
TaxTMI 
