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of <h1>High Court rules in favor of Small Scale Industrial Unit on sales tax exemption for transformer repair & assembly</h1> The High Court overturned the decision of the Orissa Sales Tax Tribunal and ruled in favor of the Petitioner, a Small Scale Industrial Unit, regarding the ... Exemption from sales tax under Entry 30- FFF of the tax free schedule - repairing/assembling of transformer - HELD THAT:- This Court in M/S. BAJRANGBALLI WIRE PRODUCTS PVT. LTD. VERSUS STATE OF ORISSA, REPRESENTED BY THE COMMISSIONER OF SALES TAX, ODISHA, CUTTACK [2021 (4) TMI 1046 - ORISSA HIGH COURT] has held that the sales tax authority could not have ignored the DIC certificate issued in favour of the Petitioner to deny sales tax benefit in terms of the IPR. In the instant case the Tribunal was in error in ignoring the DIC certificate. The permanent registration certificate clearly mentioned repairing of transformers as one of the activities. This certificate had to be read with the eligibility certificate to understand the activities for which the Petitioner was granted exemption. Revision disposed off. Issues:- Interpretation of sales tax exemption for repairing/assembling transformers under Entry 30-FFF of the tax free schedule.- Validity of the re-assessment order denying sales tax exemption.- Consideration of DIC certificate for granting sales tax benefit.- Application of the definition of 'manufacture' and 'works contract' under the Orissa Sales Tax Act.Interpretation of Sales Tax Exemption:The High Court dealt with revision petitions arising from a common order of the Orissa Sales Tax Tribunal, dismissing the Petitioner's appeal regarding sales tax exemption for repairing/assembling transformers under Entry 30-FFF of the tax free schedule. The Court framed a question regarding the justification of denying the exemption for these activities.Validity of Re-Assessment Order:The Petitioner, a Small Scale Industrial Unit, received an eligibility certificate entitling sales tax exemption for assembling and repairing transformers under the Industrial Policy Resolution, 1989. However, the Assessing Officer re-opened the assessment based on an objection, claiming that repairing transformers for GRIDCO did not qualify for exemption. This led to re-assessment orders denying the exemption and raising demands against the Petitioner.Consideration of DIC Certificate:The Court emphasized that the DIC certificate permitting tax exemption for repairing transformers should be honored, as it aligned with the activities mentioned in the permanent registration certificate issued to the Petitioner. The Court noted that the Department could not disregard the DIC certificate and deny the relief to the Petitioner.Application of 'Manufacture' and 'Works Contract' Definitions:The Court referred to the definitions of 'manufacture' and 'works contract' under the Orissa Sales Tax Act, highlighting that 'works contract' falls within the scope of 'manufacture.' It was noted that 'works contract' is not excluded from the definition of 'manufacture,' emphasizing that the activities performed by the Petitioner were covered under the exemption granted by the DIC.Conclusion:After considering the submissions and legal provisions, the Court set aside the impugned orders of the Assessing Officer, Assistant Commissioner of Sales Tax, and the Tribunal. The Court ruled in favor of the Petitioner, holding that the Tribunal erred in denying sales tax exemption for repairing and assembling transformers. The revisions were disposed of with no order as to costs, and an urgent certified copy of the order was directed to be granted.
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