1964 (4) TMI 73

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....o a registered dealer, named M/s. S. Lal and Co. Ltd., BA 1335. Similarly, for the quarter ending September 30, 1951, he claimed a deduction of Rs. 15,677-1-3. By two assessment orders passed under section 12(2) of the Act, the Sales Tax Officer, Cuttack III Circle, Jeypore, Orissa, determined the tax payable allowing the deduction of Rs. 2,40,000 and Rs. 15,677-1-3 under section 5(2)(a)(ii). The dealer filed appeals to the Assistant Collector, Sales Tax, challeging the assessment on grounds which are not relevant. The dealer later filed revisions against the decision of the Assistant Collector. While the revisions were pending, the Legislature amended the Orissa Sales Tax Act in 1957, by the Orissa Sales Tax (Amendment) Act (Orissa Act XX....

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...., the Sales Tax Officer was wrong in allowing the said deduction. The answer to the question referred depends on the correct interpretation of section 5(2)(a)(ii) and rule 27(2). They read thus: "Section 5(2)(a)(ii). Sales to a registered dealer of goods specified in the purchasing dealer's certificate of registration as being intended for resale by him in Orissa......and on sales to a registered dealer of containers or other materials for the packing of such goods: Provided that when such goods are used by the registered dealer for purposes other than those specified in his certificate of registration, the price of goods so utilised shall be included in his taxable turnover." "Rule 27(2). Claims for deduction of turnover under sub-claus....

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.... of registration, and directs that, in that event, the price of goods so utilised shall be included in his turnover. Therefore, there is nothing in the section itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, then the price of goods is included in the taxable turnover of the buying dealer. But Mr. Ganapathy Iyer says, be it so, but the rule-making authority is entitled to make rules for carrying out the purposes of the Act, and rule 27(2) is designed to ensure that a buying dealer's certificate of registration does, in fact, mention that the goods are intended for resale by him, and for that purpose it has chosen one exclusive method of proving the fact before a Sales Tax Office....