Oil Cake and De-Oiled Cake are held different products; but benefit of reduction in the rate of tax is given to assessee, as assessment granting benefit cannot be reopened, Court held
Civil Appeal No. 4760 of 2016
Bench: Justice Dipak Misra; Justice Shiva Kirti Singh
Case Brief: In the present matter, the assessee came before this bench challenging the decision of the High Court. In the facts of the case, the assessee is engaged in the manufacturing of the refined edible oil and for the assessment year ending on 31-02-2003, it had filed Revised annual Return in Form 4 and as it had sold Sunflower De- oiled Cake and several other goods in the course of inter- state trade and commerce, the appellant- assessee produced ‘C’ Forms. The appellant here admitted its tax liability at 2% on the sale of said Sunflower De- oiled Cake in the course of inter- state trade and commerce. Earlier, the Assessing authority had passed order by holding that a sum of Rs. 4,75,68,764 was subjected to tax at 2%, also benefit on production of ‘C’ Form is also granted. Moreover, the succeeding assessing officer formed a view that there was an escapement of tax due to the reason that the inter- state sales of said product was actually liable to tax at 4%. In an appeal, the appellate authority held that the change of opinion could not have been a ground for reopening of assessment in exercise of power under Section 12-A of the Karnataka Sales Tax Act, 1957, thus, said reopening is set aside. However, Assessee again preferred appeal before Tribunal claiming oil- cake and de- oiled cake are one as per commercial parlance and rate of 2% was to be applied. Tribunal allowed the claim of assessee and directed that the Reassessment order to modify as given. However, this decision was also challenged before the High Court in Revision petition, and that Court found distinction between oil cake and de- oiled cake, thus decision was favoured to revenue and against assessee.
The bench found that the oil cake is one of the goods specified in the serial no. 6 of the Notification issued by Karnataka Government granting reduction in the rate of central sales tax payable on inter- state sales. This bench also fond from the notification that the competent authority while exercising power under section 8(5) of the CST Act has kept the reduction of Tax qua de- oiled cake from the purview of Notification. As such, the bench found High court’s decision correct. However, the bench found a fact remaining that the assessing authority had expressed its view as to the rate of tax on the de- oiled cake while scrutinizing ‘C’ Forms which is an expression of opinion on available materials brought on record, thus, the First appellate authority and Tribunal were justified in concurring the said findings. Thus, the bench found that the finding of the High Court as to the similarity of both the products is not defensible. Thus, the appeal of assessee allowed in part and High Court’s view that both the products are different, found correct, but assessee should be reaped the benefit of the initial assessment as the said should not have been reopened.
Read the Judgment: M/S Ravi Prakash Refineries (P) Ltd. Vs State of Karnataka