TaxTMI 
TaxTMI 
2007 (3) TMI 259
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....Corporation to be a small scale industry set up on or after 1-4-1986 and commencing commercial production thereafter. It is furthermore not in dispute that by reason of a notification dated 22-12-1989, the State Government in exercise of its powers conferred upon it under Section 8 of the Orissa Sales Tax Act, 1947, notified 'Iron and Steel' to be taxable at the first point of sale, in a series of sale by successive dealers, when such sale is effected by a dealer liable to pay tax under the Act. It is also not in dispute that prior to issuance of the said notification the taxable event was the last purchase. It has not been denied or disputed before us that the exemption notification dated 13-5-1986 is applicable in the case of the assessee. It is also not in dispute that the said exemption relates to transaction of purchase or sale of raw material which go into the composition of the finished product manufactured by the assessee in the State. 3. Respondent had been making purchases from the Rourkela Steel Plant of the Steel Authority of India Ltd. Admittedly, the benefit of the exemption notification in respect of such purchases have been granted to the respondent-assessee. Adm....
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....parties 5 and 6 without taking any objection of limitation will consider the question of the exact amount of refund to which the petitioner is entitled to under the Industrial Policy Resolution, 1986 and the Finance Department Notification No. 5389 dated 13-2-1987 and communicate their decision within a period of three months of receipt of the application in the prescribed form." 7. However, the assessing officer in its order dated 18-12-1997 upon examining the matter opined that :- "...Being asked whether the sellers from whom he purchased the "Iron and Steel" are the first or subsequent sellers, Sri Agarwal expressed his inability to say whether they were first or subsequent sellers. His only submission was that they have purchased "tax paid" materials. On scrutiny of the refund applications with reference to relevant purchase bills of "Iron & Steel" and other connected documents furnished by the dealer and after giving him reasonable opportunity of being heard, it is found that :- Firstly, the dealer M/s. Crown Re-rollers (P) Ltd. has not paid any amount of Orissa Sales Tax on purchase of any goods which are declared U/s. 14 of the Central Sales Tax Act, 1956. He has....
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....urt, however, did not grant any interest in favour of the respondent-assessee. Both the parties are, thus, before us. 10. Mr. Joseph Vellapally, the learned senior Counsel appearing on behalf of the appellant, in support of this appeal raised the following contentions :- 1. The High Court committed a manifest error in passing the impugned judgments insofar as it failed to take into consideration that the taxable event in sales tax law being the transaction of sale, exemption to pay tax, if any, would be available only where a transaction is taxable. 2. Exemption notification would apply only when the manufacturer establishes that he had purchased raw material from a registered dealer which had gone into the composition of the finished product manufactured by it in the State. 3. The order of the High Court passed in OJC No. 8052/1992 did not confer any right on the assessee to get any specific amount by way of refund and, thus, the High Court misdirected itself in assuming that it was so entitled. 4. Exemption notification read with the Industrial Policy does not give any right to claim refund from the State as the Sales Tax Officer being a creature of statute can gra....
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....espondents. 12. Applicability of the exemption notification, in the instant case, is not in dispute. The fact that the dealers, from whom the respondent had made purchases of raw material are registered, is also not in dispute. The goods purchased by the respondent are tax paid goods. Taxable event, however, under sales tax laws is the transaction of sale. Exemption, thus, would be available only where such a transaction takes place. So long as the taxable event was the last purchase, no problem arose. The State, however, altered the taxable event. The validity of the notification altering the taxable event at the first sale point by notification dated 22-12-1989 with effect from 1-1-1990 cannot also be disputed. 13. In Re. The Bill to Amend S. 20 of the Sea Customs Act, 1878, and S. 3 of the Central Excises and Salt Act, 1944 [(1964) 3 SCR 787] this Court held : "This will show that the taxable event in the case of duties of excise is the manufacture of goods and the duty is not directly on the goods but on the manufacture thereof. We may in this connection contrast sales tax which is also imposed with reference to goods sold, where the taxable event is the act of sale. T....
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.... notification, none of the subsequent sales thereof could be subjected to levy of sales tax. 17. In State of Bihar & Others v. Suprabhat Steel Ltd. and Others, (1999) 1 S.C.C. 31 this Court has held :- "7. Coming to the second question, namely, the issuance of notification by the State Government in exercise of power under Section 7 of the Bihar Finance Act, it is true that issuance of such notifications entitles the industrial units to avail of the incentives and benefits declared by the State Government in its own Industrial Incentive Policy. But in exercise of such power, it would not be permissible for the State Government to deny any benefit which is otherwise available to an industrial unit under the Incentive Policy itself. The Industrial Incentive Policy is issued by the State Government after such policy is approved by the Cabinet itself. The issuance of the notification under Section 7 of the Bihar Finance Act is by the State Government in the Finance Department which notification is issued to carry out the objectives and the policy decisions taken in the industrial policy itself. In this view of the matter, any notification issued by Government order in exercise of....
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.... in the market. Sales tax is an indirect tax which is ultimately passed on to the consumer. If an industry is exempt from tax the ultimate beneficiary is the consumer. The industry is allowed to overcome its teething period by selling its products at comparatively cheaper rate as compared to others. Therefore, both the manufacturer and consumer gain, one by concession of non-levy and other by non-payment. Such provisions in an act or notification or orders issued by Government are neither illegal nor against public policy. 12. But the refund of tax is made in consequence of excess payment of it or its realization illegally or contrary to the provisions of law. A provision or agreement to refund tax due or realized in accordance with law cannot be comprehended. No law can be made to refund tax to a manufacturer realized under a statute. It would be invalid and ultra vires..." 19. In that case, the issue was as to whether the manufacturer of Banaspati had set up an industry in the State of Punjab, on the assurance that the sales tax amount actually collected by it from the ultimate purchasers, would be refunded to it by way of incentive, can be enforced by a court of law. Such ....