M/S Indian Oil
Corporation Limited Vs. Commr. of Sales Tax & Ors. [2008] INSC 1327 (7
August 2008)
Judgment
CIVIL APPELLATE
JURISDICTION CIVIL APPEAL NO.5287 OF 2007 M/s. Indian Oil Corporation Ltd.
...Appellant(s) Versus Commr. of Sales Tax & Ors. ...Respondent(s) ORDER
The fundamental issue which arises for determination in a pending statutory
Appeal No.AA-174/CUIE/2006-07/CT before the Assistant Commissioner of Sales
Tax, Cuttack-I Range:Cuttack, Orissa, is whether sale of Superior Kerosene Oil
by the appellant-Indian Oil Corporation Ltd. (IOC) to another oil company via
PDS route is exempted from sales tax in terms of notification dated 1st July,
2000 issued by the Finance Department, Government of Orissa.
Before the Assistant
Commissioner of Sales Tax, Cuttack-I, an application for stay was moved. It was
refused. Aggrieved by the decision refusing stay, the interim matter was
carried to the Commissioner of Commercial Taxes, Cuttack, Orissa. Stay was
refused also by the Commissioner. Hence, a Writ Petition came to be filed by
the appellant Company. By the impugned order, the High Court directed the
appellant IOC to pay a sum of Rs.75 lakhs pending hearing and final disposal of
the appeal by the Assistant Commissioner of Sales Tax. Hence this Civil Appeal.
Normally, this Court
does not interfere in interim matters particularly when the matter concerns
levy of tax. However, this is a peculiar case for two reasons, i.e., IOC Ltd.
is a public sector company in a priority sector which is obliged to sell
kerosene via PDS route. The demand is for Rs.1.94 Crores (approx.) and, in the
circumstances, we are of the view that to call upon IOC at this stage to
deposit a huge amount of Rs.1.94 Crores (approx.) would have a serious effect
on the PDS sales. On the other hand, we are satisfied that IOC is a substantial
company. It is in a sound financial position and it can discharge its liability
at a later date, if need be.
In the circumstance,
we are of the view that ends of justice would be met if the Assistant
Commissioner of Sales Tax, Cuttack is directed to hear and dispose of the First
Appeal pending before him within a period of three months from today.
Before concluding, we
may also record that IOC through its counsel has given an undertaking to this
Court that in the event of the Department succeeding in the appeal pending
before the Assistant Commissioner of Sales Tax, Cuttack, it will pay the tax
due with interest in accordance with the provisions of the Orissa Sales Tax
Act, 1947.
Before concluding, we
may point out that, according to the Department, the transactions in question
do not constitute PDS sales. This question will also have to be gone into by
the Assistant Commissioner of Sales Tax, Cuttack, in the pending First Appeal.
We express no opinion in that regard.
Pending First Appeal,
however, no coercive steps to be taken.
Civil Appeal is
disposed of accordingly. No order as to costs.
...................J.
(S.H. KAPADIA)
..................J.
(B. SUDERSHAN REDDY)
New
Delhi, August 07, 2008.
3 IN THE SUPREME
COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.4933 OF 2008
(Arising out of S.L.P.(C) No.5658/2007) M/s. Bharat Petroleum Corp. Ltd.
...Appellant(s) Versus Commr. of Sales Tax & Ors. ...Respondent(s) ORDER
Leave granted.
The fundamental issue
which arises for determination in a pending statutory Appeal
No.AA-302/CUIE/2006-2007/CT before the Assistant Commissioner of Sales Tax,
Cuttack-I Range: Cuttack, Orissa, is whether sale of Superior Kerosene Oil by
the appellant-Bharat Petroleum Corporation Ltd. (BPCL) to another oil company
via PDS route is exempted from sales tax in terms of notification dated 1st
July, 2000 issued by the Finance Department, Government of Orissa.
Before the Assistant
Commissioner of Sales Tax, Cuttack-I, an application for stay was moved. It was
refused. Aggrieved by the decision refusing stay, the interim matter was
carried by the appellant herein in revision to the Commissioner of Commercial
Taxes, Cuttack, Orissa. The Revisional Authority partly allowed the Revision
Petition and directed the appellant to pay a sum of Rs.65 lakhs. Being
aggrieved, a Writ Petition came to be filed by the appellant Company. By the
impugned order, the High Court directed the appellant-BPCL to pay a sum of
Rs.20 lakhs pending hearing and final disposal of the appeal by the Assistant
Commissioner of Sales Tax. Hence this Civil Appeal.
Normally, this Court
does not interfere in interim matters particularly when the matter concerns
levy of tax. However, this is a peculiar case for two reasons, i.e., BPCL Ltd.
is a public sector company in a priority sector which is obliged to sell
kerosene via PDS route. The demand is for Rs.1.34 Crores (approx.) and, in the
circumstances, we are of the view that to call upon BPCL at this stage to
deposit a huge amount of Rs.1.34 Crores (approx.) would have a serious effect
on the PDS sales. On the other hand, we are satisfied that BPCL is a
substantial company. It is in a sound financial position and it can discharge
its liability at a later date, if need be.
In the circumstance,
we are of the view that ends of justice would be met if the Assistant
Commissioner of Sales Tax, Cuttack is directed to hear and dispose of the First
Appeal pending before him within a period of three months from today.
Before concluding, we
may also record that BPCL through its counsel has given an undertaking to this
Court that in the event of the Department succeeding in the appeal pending
before the Assistant Commissioner of Sales Tax, Cuttack, it will pay the tax
due with interest in accordance with the provisions of the Orissa Sales Tax
Act, 1947.
Before concluding, we
may point out that, according to the Department, the transactions in question
do not constitute PDS sales. This question will also have to be gone into by
the Assistant Commissioner of Sale Tax, Cuttack, in the pending First Appeal.
We express no opinion in that regard.
Pending First Appeal,
however, no coercive steps to be taken.
Civil Appeal is
disposed of accordingly. No order as to costs.
...................J.
(S.H. KAPADIA)
...................J.
(B. SUDERSHAN REDDY)
New
Delhi, August 07, 2008.
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