STATE OF ORISSA versus M.A. TULLOCH AND CO.

Citation: [1964] 7 S.C.R. 816 · Decided: 24-04-1964 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

1964 
.April 21 
816 
SUPREME COURT REPORTS 
STATE OF ORISSA 
v . 
M.A. TULWCH AND CO. 
[1964} 
[K. SUBB~ RAO, J. C. SHAH AND S. M. SIKR•, JJ.] 
Sales Tax-Sale to Registered deale.r-Claim for deduction-
Production of declaratio71. under r. 27(2) if obligatory-Orissa 
Sales Tax Act, 1947 (Orissa 14 of 1947), s. 5(2)(a) (ii), Orissa Sales; 
Tax Rules, 1947 r. 27(2)-0rissa Sales Tax (Amendment} Act 
(Orissa 10 of 1957). 
Assessment orders were passed by the Sales Tax Officer 
allowing the deductions of two amounts claimed by the respon-
dent-dealer under s. !>(2)(a)(ii) of the Orissa Sales Tax Act in: 
respect of goods sold to a registered dealer. The respondent-
dealer filed appeals to the Assistant Collector Sales Tax, chal-
lenging the assessment on grounds which were not relevant and 
against those decisions revisions were filed by the dealer. While 
the revisions were pending the Orissa 
Sales Tax Act was 
amended by Orissa Sales Tax (Amendment) Act (Orissa Act, 10' 
of 1957) with the result that revisions were treated as appeals 
to the Sales Tax Tribunal, and it enabled the Government to 
file cross-objections. In pursuance, the State filed cross-objec-
tions challenging the deductions on the ground that the dealer 
had not produced any declaration as required under r. 27(2) of 
the Orissa Sales Tax Rules, 1947. The Tribunal upheld this 
objection and directed that fresh assessments be made. 
On 
statement of the case, the High Court answered that the asses-
sing officer was not wrong in allowing the deductions. 
On 
appeal by special leave). 
Held: (i) There is nothing in s. 5(2)(a) (ii) itself that disenti-
tles a selling dealer to a deduction, but if the contingency pro-
vided in the proviso occurs, then the price of goods is included 
in the taxatle turnover of the buying dealer. 
(ii) The production of a declaration under r. 7(2) is not 
always obligatory on the part of a selling dealer when claiming 
the exemption. It is open to him to claim exemption by adduc-
ing other evidence so as to tring the transaction w1thin the 
scope of s. 5(2)(a)(ii). Rule 27(2) must be reconciled with the 
section and the rule can be reconciled by treating it as direc-
tory. But the rule must be substantially complied with in every 
case. It is for the Sales-tax Officer to be satisfied that, in fact. 
the certificate of registration of the buying dealer contains the 
requisite statement, and if he has any doubts about it, the selling 
dealer must satisfy his doubts. But if he is satisfied from other 
facts on the record, it is not necessary that the selling dealer 
should produce a declaration in the form required in r: 27(2)~ 
before being entitled to a deduction. 
Member, Sales-tax Tribunal, Orissa v. M/s. S. Lal & Co. 
(1961) 12 S.T.C. 25, referred to. 
CIVIL APPELLATE JURISDICTION: 
Civil Appeals Nos. 
507-508 of 1963. 
Appeal by special leave from the judgment 
and order dated November 4, 1950, of the Orissa High Court 
in Special Jurisdiction Cases Nos. 38 and 39 of 1958. 
R. Ganapathy Iyer and R. N. Sachthey, for the appellant 
(in both the appeals). 
· 
7 S.C.R. 
SUPREME COURT REPORTS 
817 
B. Sen and S. N. Mukherjee, for the respondents (in both 
1961 
the appeals). 
Staie 
of on ... 
April 21, 1964. The Judgment of the Court was delivered JI.A.Tu~'oclrnndCo. 
by 
SJKRI. J.-The respondent, hereinafter referred to as the 
the dealer, filed a return for the quarter ending June 30, 1951. 
under the OriGsa Sales Tax Act (Orissa Act XIV of 1947) 
(hereinafter referred to as the Act). He claimed a deduction 
of Rs. 2,40,000/- under s. 5(2)(a)(ii) in respect of the goods 
sold to a registered dealer, named Mis. Lal & Co. Ltd., BA 
1335. Similarly, for the quarter ending September 30. 1951, 
he claimed a deduction of Rs. 15,677 JI/ 3. 
By two assess-
ment orders passed under s. 12(2) of the Act, the Sale;> Tax 
Officer, Cuttack III circle, Jaipur, Orissa, determined the tax 
payable allowing the deduction of Rs. 2,40.000 /-
and 
Rs. 15,677/1/3, under s. 5(2)(a)(ii). The dealer filed appeals 
to the Assistant Collector, Sales Tax, challenging the asses;;. 
ment 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 Orissa Sales Tax <Amend-
ment) Act (Orissa Act XX of 1957). The effect of this amend-
ment was that revisions were treated as appeals to Sales Tax 
Tribunal,

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