Reckitt Benckiser (India) Ltd. Vs State of Odisha (Orissa High Court)
Held that distinct commercial product Robinson Barley and Purity Barley cannot be classified as cereal. Hence taxable under residual entry @12% under Orissa Sales Tax Act, 1947.
Facts-
The main issue involved in the matter is that Robinson Barley and Purity Barley manufactured by the petitioner should be subjected to sales tax under Orissa Sales Tax Act, 1947 under entry meant for cereals covered under Entry 16 List C @4% or under the residual entry at 12%.
Conclusion-
In the present case, there can be no doubt that in trade parlance ‘Robinson Barley and Purity Barley’ would not be simply understood as ‘barley’. In other words, they are identifiable, distinct, commercial products different from ordinary ‘barley’. The distinct commercial product ‘Robinson Barley’ cannot, as pointed out in Satyanarayan Bhandar be classified as ‘cereal’ which is taxable @4% and has to be brought under the residual entry taxable @ 12%.
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’.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. These three tax revision petitions by Reckitt Benckiser (India) Ltd. raise an identical question of law viz., whether Robinson Barley and Purity Barley manufactured by the Petitioner should be subject to sales of tax under the Orissa Sales Tax Act, 1947 (OST Act) under the entry meant for cereals covered under Entry 16 List C @ 4% or under the residual entry at 12%?
2. While TREV No.176 of 2001 pertains to the period 1990-91, STREV No.75 of 2003 pertains to the period 1991-92 and STREV No.30 of 2012 pertains to the period 2000-01. In each of the assessment orders passed for the aforementioned periods, the Sales Tax Officer (STO) i.e. Assessing Officer (AO) rejected the plea of the Petitioner 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. The above orders have been confirmed by the Orissa Sales Tax Tribunal (‘Tribunal’) by rejecting the Petitioner’s appeals.
3. It requires to be noted at the outset that there was a batch of six revision petitions filed by the Petitioner including the present three revision petitions. STREV No.75 of 2011 for the period 2001-02; STREV No.56 of 2010 for the period 2002-03; STREV No.55 of 2011 for the period 2004-05 were all disposed of on 20th June, 2022 itself.
Relevant provisions
4. At the outset, it must be observed that the Entry number in the rate chart has been varied by fresh notifications issued from time to time. As per the Rate notification with effect from 1st April, 2001 issued by the competent authority in exercise of its power under Section 5(1) of the OST Act, the particulars of the serial number and the rate of sales tax on which reliance is placed by the Petitioner is given as under:
