Full Judgment
R.K. Patra, J.
1. Originally the Orissa Sales Tax Tribunal under Section 24(1) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as 'the Act') framed the following two questions and referred the same to this Court for opinion :
(1) Whether the learned Sales Tax Tribunal is justified in allowing the claim of the assessee who is not included in the expression 'Defence Service Installation' in view of the provision under law in serial No. 30 of the tax-free Schedule of the CST Act ?
(2) Whether the learned Sales Tax Tribunal is justified in allowing the claim of tax-free taking into consideration the ultimate sale of goods not on the hands of the assessee ?
2. During the pendency of this application, Section 24 of the Act came to be amended by virtue of which the said pending application has been registered, as tax revision.
3. This relates to assessment year 1986-87. The opposite party sold Indian-made foreign liquor worth Rs. 9,71,852.86 to defence personnel and other defence organisations free of tax treating the sales to be coming under serial No. 30 of the tax-free list. The assessing officer did not accept the plea of the opposite party that such sales come under serial No. 30 of tax-free list and accordingly levied tax. The opposite party's first appeal was without any success. In the second appeal filed by it, the Tribunal held that the goods sold would be coming under serial No. 30 which read as follows :
'Sale of goods to the military personnel by the defence service installations.'
A bare reading of the entry 30 of the tax-free list shows that sale of goods to the military personnel by the defence service installations is only exempted but the Tribunal took the view that if the sales effected to defence organisation is taxed, the ultimate tax burden will be on the military personnel which they have to pay while effecting purchases of such goods from defence service installations in which case it would defeat the purpose of the provision granting exemption. The Tribunal accordingly held that the sale transaction is to be exempted from payment of sales tax. On careful consideration of the submission of the counsel, we are of the opinion that the view taken by the Tribunal in the matter cannot be faulted with. The aforesaid interpretation stands confirmed by the Government in the Finance Department notification dated February 8, 1999 which reads as follows :
'(iii) after serial No. 29, the following hew serials and entries shall be inserted under appropriate columns, namely :-- (1) (2) (3).............29-B Sale of goods to defence service installationslocated inside the State of Orissa for resale tomilitary installations or personnel.'
4. Under the circumstances, we are of the opinion that the answer to the question Nos. 1 and 2, referred to above, is in favour of the assessee-opposite party. There is no merit in this revision and accordingly the same is dismissed.
L. Mohapatra, J.
5. I agree.