The Orissa High Court directed the Assessing Officer to re compute tax liability and ruled that the supply of ballast and chips as “minerals” falls under Entry 117 of taxable list subject to tax at 4%.
The petitioner, M/s Saraswati Stone Quarry is a registered dealer under the Odisha Sales Tax Act (OST)1947, having stone quarry, assailed the common order passed by the Odisha Sales Tax Tribunal, Cuttack, directed against the order of the Assistant Commissioner of Sales Tax in connection with Assessment framed under Section 12(4) of the Odisha Sales Tax Act, by the Sales Tax Officer, pertaining to the year 2002-03.
The assessing authority levied tax at 12% treating supply of ballast to be goods not specified elsewhere in the schedule of taxable goods. However, he has allowed deduction towards loading charges ascertaining the same to be post-sale service rendered by the dealer.
Rudra Prasad Kar, the Counsel appearing for the petitioner submitted that the commodities, ballast and chips, fall within the meaning of Entry 117— “Ores and Minerals”— of the schedule of goods subject to sales tax at 4% and the transportation charges including the incidental charges was to be deducted from the taxable turnover as they are separately charged.
The Counsel further contended that such charges being post sale event, would not form part of “sale price” as defined under Section 2(h) and thereby eligible for deduction in terms of Section 5(2)(A)(a)(iii) of the OST Act.
In State of Odisha v. D.K. Construction, it was observed that the treatment of supply of ballast and chips as “minerals” falling within ambit of Entry 117 of the taxable list subject to tax at 4% and deduction of incidental charges incurred from gross turnover have been decided in favour of petitioner.
The Court of observed that “This Court, on perusal of record, finds that the factual position obtained in D.K. Construction is identical to the present case and similar questions of law as posed in the present revision petition are decided in favour of the petitioner-assessee and against the revenue.”
The Court directed the Assessing Authority is directed to re-compute the tax liability as per observation made above and taking into consideration the judgment of the Court in the case of State of Odisha v. D.K. Construction.
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