State Of Odisha Represented By vs M/S. K.K. Roller Flour Mills (P)
2023 Latest Caselaw 11133 Ori

            IN THE HIGH COURT OF ORISSA AT CUTTACK
                            STREV No. 13 of 2016

State of Odisha represented by          .....                             Petitioner
Commissioner of Sales Tax,
Odisha
                                                        Mr. Sunil Mishra, SC for
                                                     Commercial Tax and GST
                                                 along with Mr. Anand Das, ASC
                                        Vs.

M/s. K.K. Roller Flour Mills (P)        .....                         Opposite Party
Ltd.

                                                        Mr. A.K. Mohanty, Advocate
             CORAM:
                   THE CHIEF JUSTICE
                   JUSTICE SAVITRI RATHO

                                            ORDER

11.09.2023 Order No.

08. (Through hybrid mode)

1. Heard Mr. Sunil Mishra, learned Standing Counsel for

Commercial Tax and GST along with Mr. Anand Das, learned

Additional Standing Counsel and Mr. A.K. Mohanty, learned

counsel appearing for the opposite party-assessee.

2. By means of this revision petition (STREV) filed under

Section 24 of the Odisha Sales Tax Act, 1947 read with Rule 52A of

the Odisha Sales Tax Rules, 1947, the order dated 08.01.2016

passed in Second Appeal No. 1459 of 2001-02 by the Full Bench of

Odisha Sales Tax Tribunal under Annexure-3 to the petition has

been challenged.

3. In the said Second Appeal, the order dated 24.11.2001 passed

by the learned Assistant Commissioner of Sales Tax, Cuttack I

Range, Cuttack in Sales Tax Appeal No. AA-167-CUIE-2001-2002

was challenged. The First Appellate Authority has held as follows:

"Sale of bran was made exigible to tax @ 4% with effect

from 08.02.99 vide Government of Orissa in Finance

Department Notification No. 86/99 dtd. 8.02.99 with

deletion of the condition "If sold for use as cattle feed". In

view of this codal provision, the appellant is liable to pay

Orissa Sales Tax @ 4 % and surcharge due on the sale

value of wheat bran of Rs.1, 17, 32, 810.75 and this is

exactly what the LAO has adopted for the purpose of his

assessment of tax. In view of the above discussion, it

becomes quite clear that the contention taken by the I.A. to

keep the sale turnover of wheat bran outside the scope of

taxation merits no consideration and, therefore, the same

fails. The LAO is found justified in disallowing the

appellant his unjustified and illegal claim of deduction

made towards sale of free goods needing no interference

from this forum.

Accordingly, the gross turnover disclosed by the

appellant and adopted by the LAO is upheld in appeal. The

taxable turnover is re-determined at Rs.7,28, 87, 899.99.

Tax including surcharge due comes to Rs.32, 58, 843.28.

The appellant already having paid Rs.27, 27, 239.00 under

Rule 36 of the O.S.T. Rules is now required to pay the

balance amount of Rs.6, 25, 604.00 as per this order of

appeal."

It is apparent that the first appeal was partly allowed.

4. Against the said order of the First Appellate Authority, the

dealer, the opposite party has filed the appeal under Section 12 (4) of

the Odisha Sales Tax Act. By the impugned order, the said appeal

was allowed by setting aside the order dated 24.11.2001 of the First

Appellate Authority.

5. It may be gainfully noted that the order of the First Appellate

Authority has observed inter alia that by SRO No. 150/2001 which

was simultaneously issued with effect from 01.04.2001, a new entry

in the list substituting entry at Sl. No. 2 and inserting only 'Bran' by

deleting 'Bran other than cattle feed'. The appellant submits that the

amendment has not left any space for doubt or differing

interpretation. But, it has been asserted by the assessee that the

intention of the legislature can be had from the subsequent

legislation. That never intended to withdraw exemption of tax on

sale of "Wheat Bran", which is essentially a cattle feed. To buttress

the said proposition a reference has been made to a decision of this

High Court in Laxmi Agency & Pathera vrs. The State of Orissa:

1995 I OLR 671. It has been observed in the said decision so far as

the Entry 30-D is concerned that the commodities catalogued under

the said entry are only enumerative and illustrative and not

exhaustive. Any goods which is known in the common parlance and

trade parlance as feed and fodder would come within the said entry.

6. While reversing the judgment of the First Appellate Authority,

the Tribunal has further observed that it is well settled that if the

conditions or the restrictions placed in order to provide exemption

militate against the purpose for which exemption has been granted

and have effect of defeating the very purpose to a large extent, then

those conditions cannot be upheld. In the case in hand, exemption

as sought to be provided under Entry 30D has been introduced with

intention to benefit the farmers for making feed and fodder available

at a affordable price and therefore, any interpretation or restriction

which would make such commodities dearer would defeat the very

purpose and intent for which such exemption was introduced.

7. The Tribunal has finally observed that the sale of wheat bran

is tax-free as contemplated under Entry 30-D under the tax-free list

during the assessment year (1999-2000) under reference and

accordingly, the demand to the tune of Rs.6,25,604/- was interfered

with and quashed.

8. Mr. Sunil Mishra, learned Standing Counsel for Commercial

Tax and GST appearing for the Revenue has contended that the said

interpretation is unsustainable in as much as when the general

provisions are contrasted with the special or the specific provision in

a tax statute, the special provision will prevail over the general

provisions.

9. To nourish his submission, Mr. Mishra has referred to the

relevant entries in the Odisha Sales Tax Act.

10. In the Schedule I is the tax free list. Entry 30-D thereunder

provides the exemption in the following manner:

"Sale of feed and fodder such as husk, straw, hay, grass,

oil-cake including de-oiled cake and manufactured mixed

balanced feed for cattle, poultry and pit shall be tax free."

11. Similarly, the Schedule II catalogues the taxable items. The

product or goods known as bran was under that schedule with tax @

4%, subject to condition and exception that if the said product or

goods are sold for use as cattle feed that will be exempted from tax

[prior to 08.02.1999].

12. It has been specifically recorded by the First Appellate

Authority that by the Finance Department Notification No. 5281-

CTA-115/98-F (vide SRO No. 81/1999) dated 08.02.1999, the said

entry was altered. By the said amendment, the clause "if sold for use

as cattle feed" has been deleted. Since 08.02.1999 bran has been

bracketed as the taxable commodity with tax liability of 4% on sale.

13. Mr. Mohanty, learned counsel appearing for the opposite

party-assessee has asserted that by the subsequent change in the

statute the bran has been made completely tax-free. Entry 30-D is

reflection of the policy drawn up for welfare of the farmers.

14. According to Mr. Mohanty, learned counsel, since the bran in

the common parlance is known as feed and fodder, therefore Entry

30-D will apply for the other Entry in order to read exemption.

15. In this context, Mr. Mohanty, learned counsel has relied a

decision of this Court in Laxmi Agency and Others vrs. The State

of Orissa and Others: 1995 (I) OLR 671 (Supra).

16. In that decision, this Court had occasion to lay down that the

subsequent statute can be clarificatory in nature. In that case, the

contention of the assessee was that insertion as made purports to be

clarificatory to avoid varying assessments. It has been observed that

it can also be said that the expression "including de-oiled cake" [in

Laxmi Agency (supra)] was used to avoid any anomaly and conflict

of views and to bring out the true meaning and effect of the term

"cattle-feed" and to clarify that it also includes "de-oiled cake".

17. According to Mr. Mohanty the said principle as laid down in

Laxmi Agency (supra) can also be applied in the present case

looking at the subsequent change in the statute whereby the bran was

included under 30-D and making the same as completely tax-free.

18. We have taken note of the submissions of the learned counsel

for the parties. The only question that is paramount and to be

responded by us is that whether in presence of a specific provision,

the general provision can have the sway or whether in presence of a

specific provision in a tax statute, can a Court embank on

interpretation by taking aid from the subsequent statute or not.

19. According to us, by enacting the notification dated 08.02.1999

the State has clearly excluded bran from exemption as provided by

Section 30-D. In terms of the specific provision, barn is exigible to

sale tax @ 4% Where the tax statute is clear, unambiguous and

direct, the court is not generally called upon to interpret such statute.

Court has to act upon the literal provision only. As such, the

observation, based on which the order of the First Appellate Court

was reversed by the Tribunal, is un-called for and the interpretation

made by the Tribunal is not only unwarranted in the present context

but is also inappropriate.

20. Hence, we quash the impugned order dated 08.01.2016 under

Annexure-3 to the writ petition and restore the order of the First

Appellate Court dated 24.11.2001, Annexure-2 to this petition.

21. In the result, the petition stands allowed. There shall be no

order as to costs.

22. Urgent certified copy of this order be granted on proper

application.

(S.Talapatra) Chief Justice

(Savitri Ratho) Judge puspa

Signature Not Verified Digitally Signed Signed by: PUSPANJALI MOHAPATRA Designation: Personal Assistant Reason: Authentication Location: Orissa High Court Date: 13-Sep-2023 11:09:57