TaxTMI 
TaxTMI 
2005 (1) TMI 645
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....s Tax Officer, Rourkela-II Circle, Panposh [now Assistant Commissioner of Sales Tax, Sundargarh Range, Rourkela (Assessment)] with effect from April 1, 2000. For the year 2000-2001, the petitioner filed consolidated return under section 11 of the Act before the Assistant Commissioner of Sales Tax, Sundargarh Range, Rourkela (Assessment). In the said return, the petitioner claimed that it had purchased goods including ammonium nitrate which were specified in its certificate of registration as being intended for use in the manufacture of goods for sale by furnishing declaration to that effect in form IV to the seller of such goods and 4 per cent on the value of such goods purchased by the petitioner was paid by the petitioner as provided in entry 48 of the notification issued under section 5(1) of the Act. The Assistant Commissioner of Sales Tax, Sundargarh Range, Rourkela (Assessment) allowed the said claim of the petitioner that it was liable to pay tax at 4 per cent on the value of such goods purchased by it on the strength of the declaration furnished in form IV and was not liable to differential tax thereon under the fifth proviso to section 5(1) of the Act. Thereafter, the Assi....
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....0 of the Orissa Sales Tax Rules, 1947, and as to why differential tax on the goods so misutilised shall not be levied. You are to produce or cause to be produced the accounts and other documents and any other evidence on which you may rely in support of your contentions. In the event of your failure to comply with all the terms and conditions of this notice, I shall proceed to revise the said order as aforesaid ex parte in accordance with law without any further reference to you. Sd/-IIIegible January 14, 2004 Commissioner of Sales Tax, Orissa." Aggrieved by the said show cause notice dated January 14, 2004 under section 23(4)(a) of the Act and rule 80 of the Rules, the petitioner has filed this writ petition. 2. Dr. Debi Pal, learned counsel for the petitioner, submitted that it will be clear from the aforesaid show cause notice that the Commissioner of Sales Tax, Orissa, has taken a view that the petitioner after purchase of the goods specified in its certificate of registration against declaration in form IV utilised the same in the manufacture of intermediate products and has not sold such intermediate products in the State of Orissa and has instead effected branch transf....
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....of the Rules after laying down the law on the subject so that the sales tax authorities do not harass the petitioner for the other periods of assessment. 3.. Mr. Ashok Mohanty, learned Senior Standing Counsel, Commercial Tax Department, on the other hand, submitted relying on the counter-affidavit filed by the opposite parties 1 to 3, that disputed questions of fact arise for decision in this case which can be adjudicated by the taxing authorities under the Act and this Court exercising powers under article 226 of the Constitution should not decide such disputed questions of fact. He cited the decision of the Supreme Court in Special Director v. Mohd. Ghulam Ghouse (2004) 1 Supreme 431, and submitted that at the stage of notice to show cause the High Court should not interfere under article 226 of the Constitution. Mr. Mohanty further submitted that the language of section 8(3)(b) of the Central Sales Tax Act and the language of entry 48 of List "C" and the fifth proviso to section 5(1) of the Act are different and therefore the decision of the Supreme Court in J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur [1965] 16 STC 563; AIR 1965 SC 1310 cited....
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....d two sections the respondent has no jurisdiction to initiate proceedings or make an inquiry under the said sections in respect of certain acts alleged to have been done by the appellants, the respondent can certainly be prohibited from proceedings with the same. ............." Thus, if the facts stated in the impugned show cause notice are assumed to be true and yet the authority had no jurisdiction to issue the notice and initiate the proceeding pursuant to the notice, the High Court can entertain the writ petition under article 226 of the Constitution. This position of law has been reiterated in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai AIR 1999 SC 22, wherein the Supreme Court has held that the jurisdiction of the High Court in entertaining a writ petition under article 226 of the Constitution in spite of alternative statutory remedy, is not affected, specially in a case where the authority against whom the writ is filed had no jurisdiction or had purported to usurp jurisdiction without any legal foundation. In the case of Special Director v. Mohd. Ghulam Ghouse (2004) 1 Supreme 431, on the other hand, the Supreme Court observed: "This Court in a large num....
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....ax, the declaration in form IV prescribed by the Rules and the fifth proviso to section 5(1) of the Act are extracted hereinbelow: Entry 48 of List "C" "Goods of the class or classes specified in the certificates of registration of the registered dealer purchasing the goods as being intended for use by him in the manufacture or processing or packing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power subject to the production of true declaration by the purchasing registered dealer or his authorised agent in form IV. ......Four per cent." Declaration in Form IV "I/we...............hereby declare that the goods purchased by me/ us in Cash Memo/Bill No............dated the..............from............shall be used in the manufacture/processing or packing of goods for sale/ in mining/generation or distribution of electricity or any other form of power." Fifth proviso to section 5(1) of the Orissa Sales Tax Act, 1947 "Provided further that where a registered dealer purchases goods of the class or classes specified in his certificate of registration as being intended for use within the St....
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.... would be inexpedient and therefore must be regarded as goods intended for use in the manufacture of goods. Relevant paragraphs from the said decision of the Supreme Court in the case of J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. Sales Tax Officer, Kanpur [1965] 16 STC 563; AIR 1965 SC 1310 are quoted hereinbelow: "...........The expression 'in the manufacture of goods' should normally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would, in our judgment, fall within the expression 'in the manufacture of goods'. For instance, in the case of cotton textile manufacturing concern, raw cotton undergoes various processes before cloth is finally turned out. Cotton is cleaned, carded, spun into yarn, then cloth is woven, put on rolls, dyed, calendered and pressed. All these processes would be regarded as integrated processes and included 'in the manufacture' of cloth. It would be difficult to regard goods u....
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....a in the manufacture or processing of intermediate products which in turn are for use within or outside the State of Orissa in the manufacture or processing of finished goods for sale. Hence if the petitioner has purchased some goods specified in its certificate of registration such as ammonium nitrate by furnishing declaration in form IV that these goods will be utilised in the manufacture of goods for sale and has paid concessional rate of tax at the rate of 4 per cent on the value of goods so purchased and has used the same within the State of Orissa in the manufacture of intermediate products such as bulk premix and such intermediate products have been subsequently utilised within or outside the State of Orissa in the manufacture of finished products for sale, the petitioner cannot be held to be liable for the differential tax over and above 4 per cent tax paid by him on the purchase of the goods as if the petitioner had not furnished the declaration. The test to be applied in each case is whether the goods specified in the certificate of registration of the registered dealer and purchased by the registered dealer have been used by him in the manufacture or processing of goods ....