Orissa High Court
M/S. National Aluminium Company vs Commissioner Of Commercial Taxes on 6 December, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
OTAPL No. 24 of 2008
M/s. National Aluminium Company .... Appellant
Ltd.
Mr. Sudeepta Kumar Singh, Advocate
-versus-
Commissioner of Commercial Taxes, .... Respondents
Cuttack and others
Mr. S.K. Pradhan, Additional Standing Counsel
CORAM:
THE CHIEF JUSTICE
JUSTICE M.S. RAMAN
ORDER
06.12.2022
Order No.
21. 1. This appeal is directed against an order dated 12th January, 2007
passed by the Commissioner of Commercial Taxes, Cuttack in
Revision Case No.BH-II-4/97-98 whereby the order dated 31st
August, 1995 of the First Appellate Authority allowing the appeal
filed by the present Appellant/Assessee and reducing the impugned
assessment and directing refund of amount of Rs.3,62,485 was
sought to be revised suo motu.
2. The reason for exercising the suo motu revisional power was
that the Appellant had allegedly suppressed turnover relating to sale
of 'Exim Scrips' for the year 1991-92 and this factor was not
considered by either in the original assessment order dated 15th
December, 1992 or by the First Appellate Authority in the order
dated 31st August, 1995.
3. It was specifically contended before the Commissioner by the
present Appellant that it had merely surrendered the Exim Scrips to
the State Bank of India (SBI) and that such surrender of the Exim
Scrips would not attract the description of 'Sale' and, therefore, no
tax liability arose as a result of such surrender of Exim Scrips.
4. The above contention was negatived by the Commissioner in the
impugned order.
5. The question whether the mere surrender of Exim Scrips would
attract the definition of 'Sale' was considered by the Supreme Court
of India in Commercial Tax Officer v. State Bank of India (2016)
10 SCC 595 in the context of the expression used in the Bengal
Finance (Sales Tax) Act, 1941. There, the Supreme Court
categorically held in para 38 of the Judgment as under:
"38. Thus analyzed, the replenishment licences or Exim
scrips would, therefore, be "goods", and when they are
transferred or assigned by the holder/owner to a third
person for consideration, they would attract sales tax.
However, the position would be different when
replenishment licences or Exim scrips are returned to the
grantor or the sovereign authority for cancellation or
extinction. In this process, as and when the goods are
presented, the replenishment licence or Exim scrip is
cancelled and ceases to be a marketable instrument. It
becomes a scrap of paper without any innate market
value. SBI, when it took the said instruments as an agent
of RBI did not hold or purchase any goods. It was merely
acting as per the directions of RBI, as its agent and as a
participant in the process of cancellation, to ensure that
the replenishment licences or Exim scrips were no longer
transferred. The intent and purpose was not to purchase
goods in the form of replenishment licences or Exim
scips, but to nullify them. The said purpose and objective
is the admitted position. The object was to mop up and
remove the replenishment licences or Exim scrips from
the market."
6. In the present case, it is not disputed factually that the Appellant
had merely surrendered the REP licence/Exim Scrips to SBI. This
was not a sale which would attract tax. Since the position is now
settled in the aforementioned decision of the Supreme Court of
India, the Court has no hesitation in setting aside the impugned
order. Accordingly the order dated 12th January, 2007 passed by the
Commissioner of Commercial Taxes, Cuttack in Revision Case
No.BH-II-4/97-98 is hereby set aside and the order of the First
Appellate Authority is restored to file.
7. Since the matter has been decided on merits itself, the Court is
not considering the other plea raised by the Appellant that the
reopening of the matter by way of a suo motu revision was itself
time barred.
8. The appeal is accordingly allowed in the above terms but in the
circumstances with no order as to costs.
(Dr. S. Muralidhar)
Chief Justice
(M.S. Raman)
Judge
S. Behera
