Odisha Sales Tax Tribunal - Cuttack S.A.No.84(ET) of 2015-16 - Order

Sep 4, 2026

Order in S.A.No.84(ET) of 2015-16 before the Odisha Sales Tax Tribunal at Cuttack, arising from a Deputy Commissioner of Sales Tax decision in the Ganjam Range, Berhampur first appeal. The dealer-company, M/s. Indian Rare Earths Ltd., challenged disallowance of entry tax set-off claimed for furnace oil used in ancillary mineral production for month endings June 2007 to March 2008. Demand of tax with interest and penalty was raised through Form E-24, with arguments centered on lack of opportunity of hearing and misapplication of statutory reassessment provisions.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages7

Reading Time18 min

AccessFree to download

O R D E R

Case Background and Demand

Dealer’s Submissions and State’s Response

Scrutiny Procedure and Natural Justice Issues

BEFORE THE FULL BENCH, ODISHA SALES TAX TRIBUNAL: CUTTACK S.A.No.84(ET) of 2015-16 (Arising out of the order of the learned DCST, Ganjam Range, Berhampur First Appeal Case No. AAE.23/2008-2009 disposed of on 17.08.2009) Present: Shri G.C . Behera, Chairman Shri S.K. Rout, 2nd Judicial Member & Shri B . Bhoi, Accounts Member-I M/s. Indian Rare Earths Ltd. , Matikhalo, Chatrapur, Dist-Ganjam. ... Appellant. -Versus – State of Odisha, represented by the Commissioner of Sales Tax, Odisha, Cuttack. ... Respondent. For the Appellant: : Mr. B.R. Panda, Advocate. For the Respondent : Mr. D. Behura, S.C. (CT) . : Mr. S.K. Pradhan, Addl.S.C.(C.T.) Date of Hearing : 02.01.2024 *** Date of Order : 03.02.2024 O R D E R The dealer is in appeal against the order dated 17.08.2009 of the Deputy Commissioner of Sales Tax, Ganja mange, Berhampur (in short, ‘ld. FAA’) passed in First Appeal Case No.AAE.23/2008-09 confirming the order of scrutiny passed under Section 10 of the OETAct read with Rule 10(6)(a) of the OET Rules by the learned Sales Tax Officer, Ganjam-II Circle, Berhampur (in short, ‘ld. STO’) pertaining to the month endings June,2007 to March,2008 raising demand of ₹8,14,077 .00 which includes interest of ₹15,962 .00. 2. The factual background of the case is that the ld. STO took up scrutiny of the returns filed under Section 7(1) of the OET Act for the month endings June, 2007 to March, 2008 and could find that the dealer-company namely M/s. Indian Rare Earths Limited availed entry tax set off of ₹7,98,117.71 on purchases of furnace oil outside the state valuing ₹7,98,11,771.01 . The ld. STO disallowed the said set off of entry tax holding that furnace oil being a consumable utilized in the ancillary activities for production of minerals and not as raw materials for manufacturing of finished product, the claim of set off of ₹7,98,115.00 would not be allowed. Accordingly, the ld. STO raised demand of ₹8,14,077.00 including penalty of ₹15,962.00 upon issuance of notice in Form E-24. The first appeal as preferred by the dealer resulted in confirming the order of the ld. STO. The dealer-company having not availed the relief as cherished for in the first appeal approached this forum for justice. Hence , this second appeal. 3. The grounds of appeal, additional grounds and the cross objection filed by the State are gone through. Mr. B.R. Panda, ld. Advocate appearing on behalf of the dealer-appellant submits that there was no opportunity of being heard was afforded to the dealer- appellant before raising demand by the ld. STO unilaterally. It is further submitted that furnace oil is a raw material for production of minerals. Furnace oil is used in the process of manufacture without which the production of finished product such as minerals is not feasible. In filing additional grounds of appeal, the ld. Advocate pleads that in absence of assessment under Section 9(2) and 9(C) of the OET Act, the assessment made under Section 10 of the said Act is bad in law. On the other hand, the State supports the orders of the forums below holding that entry tax paid by the manufacturer of the scheduled goods on purchase of the raw materials which directly go into the composition of finished product by the manufacturer of the scheduled goods shall be set off against entry tax payable under Sub-Rule (2) of Rule 19 of the OET Rules. In view of the above mandate, the claim of entry tax set off on purchase of furnace oil isnot at all admissible , as the same does not directly go into composition of the finished product. 4. Having gone through the orders of the forums below , it is relevant to note that the ld. STO on scrutiny of the returns for the month endings June,2007 to March,2008 found the dealer to have availed set off of entry tax for ₹7,98,115.00 and issued a notice inform E-24 as per sub-Rule 6 (a)(b) of Rule 10 of the OET Rules. Raising of demand unilaterally by the ld. STO by simply issuance of no

FAQs

What dispute was raised in S.A.No.84(ET) of 2015-16?

The dealer appealed against an order confirming disallowance of entry tax set-off claimed on purchases of furnace oil for the month endings June 2007 to March 2008.

How much demand was raised and what did it include?

Demand was raised at ₹8,14,077.00, including interest of ₹15,962.00, along with penalty as part of the proceedings.

What was the dealer’s main legal argument in the appeal?

The dealer argued that it was not afforded an opportunity of being heard before the assessing authority raised the demand unilaterally.

Sep 4, 2026

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