Case: The State of Orissa Vs. Dinabandhu Sahu and Sons

The Assistant Sales Tax Officer, Cuttack, included in the turnover of the respondent the sale price of jeera, dhania (coriander), panmohuri, methi, postak and pipall and levied 5 per cent sales tax under the Orissa Sales Tax Act (briefly the State Act). On appeal the Assistant Commissioner of Sales Tax, Puri, allowed the claim of the respondent and held that the above items are oil-seeds within the meaning of section 14(vi) of the Central Sales Tax Act and gave the respondent the benefit of a lower tax of 2 per cent on the sale turnover of those goods instead of 5 per cent under the State Act. On appeal by the State of Orissa to the Sales Tax Tribunal claiming 5 per cent on the sale turnover thereof under the provisions of the Central Sales Tax Act, the orders of the Assistant Commissioner were affirmed. On application by the State for each of the five quarters, the Tribunal referred the following two common questions under section 24 of the StateWhether in the facts and circumstances of the case, the Sales Tax Tribunal is right in holding that jeera, dhania, panmohuri, methi, postak and pipali are oil-seeds within the meaning of section 14 of the Central Act and the tax payable under the State Law in respect of the sale or purchase of these goods inside the State, cannot exceed 2 per cent of the sale or purchase price thereof.(2) Whether the communication No. 4(8)-ST/57 dated 31st January, 1958, issued by the Government of India which is only an official communication having no statutory sanction behind it can have any legal effect to hold the goods in question as oil-seeds as understood in common parlance and whether such an official communication is binding on the Stateare not concerned with pipali in thesethese appeals came before us for hearing the respondent was not represented. We, therefore, requested Mr. Gobind Das to act as amicus curiae in these appeals.Before we may proceed further, we may immediately turn to section 14(vi) of the Central Sales Tax Act (briefly the CentralCertain goods to be special importance in inter-State trade or commerce. It is hereby declared that the following goods are of special importance in inter-State trade or commence:-(vi) Oil-seeds, that is to say, seeds yielding non-volatile oils used for human consumption, or in industry, or in the manufacture of varnishes, soaps and the like, or in lubrication, and volatile oils used chiefly in medicines, perfumes, cosmetics and theabove definition is an explanatory one and uses mentioned therein cover a wide range. If the particular items which are assessed under the State Act can be brought under the definition of "oil-seeds", as given in the above provision, the assessee will be entitled to a lower levy of sales tax.

Reasoning: These appeals arise out of a decision in a reference under section 24 of the State Act under article 136 of the Constitution and we have to consider whether it is a fit case for interference with the order of the High Court when it held that the Sales Tax Tribunal was right in its conclusion. It is true the High Court has rightly observed that the aforesaid notification of the Government of India has no statutory force and as such is not binding on the Sales Tax Officer. It cannot, however, be denied that the Ministry of Finance, Department of Economic Affairs, is intimately conversant not only with the policy of legislation for the purpose of implementation of the provisions of the Central Act but is also familiar with the nature and quality of the commodities as also their use from time to time. If, therefore, such an authority issued a notification including certain commodities under the head of oil-seeds, as defined under the Central Act, it cannot be said that the Tribunal and the High Court were not right in preferring such an opinion of the Government as good evidence for its conclusion, to the opinions relied upon by the Andhra Pradesh High Court on which great reliance has been placed by the appellant. A persual of the contents of the letters referred to in the judgment of the Andhra Pradesh High Court would indicate that the opinions cannot be said to be very firm or even final. Apart from this, it is not known whether all the uses which are mentioned in the definition of "oil-seeds" were brought to the notice of the National Chemical Laboratory, Poona and of the Central Food Technological Research Institute, Mysore, in rendering their opinions. If, therefore, the Tribunal in the facts and circumstances of the case held that the particular commodities came within the definition of clause (vi) of sect ion 14 of the Central Act, it is not possible to hold that it was not right. The answer to the first question by the High Court is, therefore, rightly in the affirmative.We do not also see anything wrong in the High Courts answering the second question in the way it did.