“Tobacco & Tobacco Products” In Schedule To Odisha Entry Tax Act Include ‘Bidi’: Orissa High Court

The Division Bench of Chief Justice Dr. S. Muralidhar and Justice Radha Krishna Pattanaik of the Orissa High Court, held in the case of M/s. Patel Brothers & Co., Sambalpur v. State of Odisha (STREV No. 29 of 2012) that “bidi” falls under the definition of “tobacco and tobacco products” as stated in Entry 16, Part I of the Schedule to the Odisha Entry Tax Act, 1999 (the “OET Act”).

Brief Facts & Issues: The basic facts and issues were that whether “bidi” falls within the category of “Tobacco and Tobacco Products” under OET Act’s item 16, Part-I of the Schedule? As the entry does not clearly state “bidi,” according to Mr. S. Lal, counsel for the petitioner, it does not fall under the purview of the aforementioned entry, as per his contentions. In addition, he argued that Entrance 31 considers “cigarette and lighter” as a separate item, meaning that it is not subject to entry tax under the OET Act unless there is a separate entry for “bidi”. On the other hand, Senior Standing Counsel Mr. S. Mishra made the point that the term “tobacco products” is broad enough to embrace “bidi,” which is simply tobacco put in Kendu leaves and smoked in rural areas.

Judgement: The Court reiterated and approved the Tribunal’s observations.  It was observed that the aforementioned bidi, sometimes known as a poor man’s cigarette, is made from Kendu leaves and contains tobacco. The tobacco used in the handmade country cigarette is manufactured tobacco, which is wrapped in rolled Kendu leaves. As a result, there was hardly any question that bidi was a tobacco product consumed in rural India but was not directly included in the Schedule of the O.E.T. Act. Accordingly, bidi is a Scheduled Good under the O.E.T. Act and is eligible for 1% of entrance tax, as determined by both lower forums and without the necessity for this Tribunal’s intervention, the court noted.

Again, the Court rejected the contention that, under Entry 31, “cigarette and lighter” is a separate item and, as a result, would not be subject to entry tax under the OET Act unless there is a separate entry for “bidi”. According to the Court, the term “tobacco and tobacco products” is broad enough to cover “bidi.” As a result, it determined that there was no error in the Tribunal’s decision to include bidi under the ambit of the aforementioned entry. It affirmed that under the OET Act, bidi is amenable to entry tax.

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