The Orissa High Court has held that the products, Robinson Barley and Purity Barley are subject to sales of tax under the Orissa Sales Tax Act, 1947 (OST Act) under the residual entry at 12%.
The petitioner, M/s Reckitt Benckiser (India) Ltd, contended that the aforementioned products of the Petitioner were nothing but barley as a cereal as mentioned in Entry 25 of List-C in Chapter III of the rate chart appended to the OST Act and the products are taxable under the entry meant for cereals covered under Entry 16 List C @ 4%.
A bench comprising Chief Justice S Muralidhar and Justice R.K. Pattanaik observed that in Telengana Steels Industries Ltd. v. State of Andhra Pradesh AIR 1994 SC 1831 a two Judge Bench of the Supreme Court had doubted the correctness of the decision in Rajasthan Roller Flour Mills.
Section 15 of the CST Act imposes certain restrictions upon, and conditions regarding imposition of tax on sale or purchase of declared goods by State Legislatures. Section 15 of the CST Act includes a condition that the tax on declared goods shall not exceed 4% and the tax shall not be levied at more than one stage.
“However, the fact remains that in Telengana Steels (supra), no reference was made to a larger Bench to decide the correctness of Rajasthan Roller Flour Mills. It is not within the purview of this Court to doubt the correctness of Rajasthan Roller Flour Mills (supra) which in its considered view applies to the case at hand. In any event, in view of the Coordinate Bench decision in Satyanarayan Bhandar (supra) which is binding on this Court and which in this Court’s view does not require reconsideration, there is no occasion to answer the question framed by this Court in the present case in favour of the Assessee,” the Court said.
Upholding the findings of the department, the Court dismissed the plea of the assessee and held that Robinson Barley and Purity Barley manufactured by the Petitioner should be taxed under the residual Entry 189 of List C of the Rate Chart appended to the OST Act and not Entry 25 relating to ‘cereals’.
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