The order of the Assistant Commissioner of Sales Tax party allowing sales tax appeal filed by the Assessee which in turn challenged the assessment order passed by the Sales Tax officer held in Justice B.P.Routray in the matters of Akbari Continental Pvt. Ltd v. the State of Odisha. [STREV No. 20 of 2007].
Background of the case involves that the petitioner is a hotelier carrying on the business of providing lodging accommodation and manufacture and sale of food, drinks etc. The petitioner is the registered dealer under the OST Act. The petitioner also registered as a small-scale industry by the district Industry centre Cuttack. It claims to be eligible for the sales tax exemption under the industry Policy Resolution. The Industry Department issued a Registration Certification in its favour showing the date of commencement of production.
In the notification of the Finance Department (FD) Government of Odisha, Finished products would be allowed exemption taking into account the installed capacity. After the commencement of Intellectual property rights issued certificate exempting petitioner from payment of sales tax. In the certificate, the petitioner unit started fixed capital investment in terms of IPR and had gone into commercial production. Petitioner is eligible for sales tax exemption on the sale of its finished product for the period of seven years from the effective date as per IPR.
The claim form exemption from the payment of sales tax was disallowed on the grounds that there is no evidence that the petitioner’s unit had been set up in terms of the policy. It is noted that Clause- 7(3)(2) of the IPR read with rule 21 of the OST Rules, the petitioner was not eligible to get sales tax incentive on its finished products as a continuing unit of the policy. Exemptions under the sales tax are granted to number of commodities and for a various of reasons. Exemptions in sales tax covers all the necessaries.
The Hon’ble Court held “Petitioner will be exempted from sales tax- Exempted to the person making supplies regardless of the nature of the outward supply. Certain supplies due to their nature and type are exempted from GST. All supplies that are notified would be eligible for the exemption”. There is no uniform policy and the practice differs from state to state. It would probably stand the test of administrative feasibility. The exemption are examined from the standpoint of equity and administrative expediency.
Judgment reviewed by Kaviya.S.