IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5287 OF 2007

M/s. Indian Oil Corporation Ltd. ...Appellant(s)

Versus

Commr. of Sales Tax & Ors. ...Respondent(s)

O R D E R

The fundamental issue which arises for determination in a pending statutory

Appeal No.AA-174/CUIE/2006-07/CT before the Assistant Commissioner of Sales Tax,

Cuttack-I  Range:Cuttack,  Orissa,  is  whether  sale  of  Superior  Kerosene  Oil  by  the

appellant-Indian Oil Corporation Ltd. (IOC) to another oil company via PDS route is

exempted from sales  tax in  terms of  notification dated 1st July,  2000 issued by  the

Finance Department, Government of Orissa.

Before the Assistant Commissioner of Sales Tax, Cuttack-I, an application for

stay was moved.  It was refused.  Aggrieved by the decision refusing stay, the interim

matter was carried to the Commissioner of Commercial Taxes, Cuttack, Orissa.  Stay

was refused also by the Commissioner.  Hence, a Writ Petition came to be filed by the

appellant Company.  By the impugned order, the High Court directed the  appellant

IOC  

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to pay a sum of Rs.75 lakhs pending hearing and final disposal of the appeal by the

Assistant Commissioner of Sales Tax.  Hence this Civil Appeal.

Normally, this Court does not interfere in interim matters  particularly when

the matter concerns levy of tax.  However, this is a peculiar case for two reasons, i.e.,

IOC  Ltd.  is  a  public  sector  company  in  a  priority  sector  which  is  obliged  to  sell

kerosene via  PDS route.   The  demand is  for  Rs.1.94  Crores  (approx.)  and,  in  the

circumstances, we are of the view that to call upon IOC at this stage to deposit a huge

amount of Rs.1.94 Crores (approx.) would have a serious effect on the PDS sales.  On

the other hand, we are satisfied that IOC is a substantial company.  It is in a sound

financial position and it can discharge its liability at a later date, if need be.

In the circumstance, we are of the view that ends of justice would be met if

the Assistant Commissioner of Sales Tax, Cuttack is directed to hear and dispose of the

First Appeal pending before him within a period of three months from today.   

Before  concluding,  we  may also  record that  IOC through  its  counsel  has

given an undertaking to this Court that in the event of the Department succeeding in

the appeal pending before  the  Assistant Commissioner  of Sales Tax, Cuttack, it

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will pay the tax due with interest in accordance with the provisions of the Orissa Sales

Tax Act, 1947.  

Before concluding, we may point out that, according to the Department, the

transactions in question do not constitute PDS sales.  This question will also have to be

gone into by the Assistant Commissioner of Sales Tax, Cuttack, in the pending First

Appeal.  We express no opinion in that regard.

Pending First Appeal, however, no coercive steps to be taken.

Civil Appeal is disposed of accordingly.  No order as to costs.

                         ...................J.               (S.H. KAPADIA)

                  ...................J.                                         (B. SUDERSHAN REDDY) New Delhi, August 07, 2008.

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4933 OF 2008 (Arising out of S.L.P.(C) No.5658/2007)

M/s. Bharat Petroleum Corp. Ltd. ...Appellant(s)

Versus

Commr. of Sales Tax & Ors. ...Respondent(s)

O R D E R

Leave granted.

The fundamental issue which arises for determination in a pending statutory

Appeal  No.AA-302/CUIE/2006-2007/CT before  the  Assistant  Commissioner  of  Sales

Tax, Cuttack-I Range: Cuttack, Orissa, is whether sale of Superior Kerosene Oil by the

appellant-Bharat Petroleum Corporation Ltd. (BPCL) to another oil company via PDS

route is exempted from sales tax in terms of notification dated 1st July, 2000 issued by

the Finance Department, Government of Orissa.

Before the Assistant Commissioner of Sales Tax, Cuttack-I, an application for

stay was moved.  It was refused. Aggrieved by the decision refusing stay, the interim

matter  was  carried  by  the  appellant  herein  in  revision  to  the  Commissioner  of

Commercial  Taxes,  Cuttack,  Orissa.   The  Revisional  Authority  partly allowed the

Revision Petition and

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directed the appellant to pay a sum of Rs.65 lakhs.  Being aggrieved, a Writ Petition

came to be filed by the appellant Company.  By the impugned order, the High Court

directed the appellant-BPCL to pay a sum of Rs.20 lakhs pending hearing and final

disposal of the appeal by the Assistant Commissioner of Sales Tax.  Hence this Civil

Appeal.

Normally, this Court does not interfere in interim matters  particularly when

the matter concerns levy of tax.  However, this is a peculiar case for two reasons, i.e.,

BPCL Ltd.  is  a  public  sector company in  a priority sector which  is  obliged to sell

kerosene via  PDS route.   The  demand is  for  Rs.1.34  Crores  (approx.)  and,  in  the

circumstances, we are of the view that to call upon BPCL at this stage to deposit a huge

amount of Rs.1.34 Crores (approx.) would have a serious effect on the PDS sales.  On

the other hand, we are satisfied that BPCL is a substantial company.  It is in a sound

financial position and it can discharge its liability at a later date, if need be.

In the circumstance, we are of the view that ends of justice would be met if

the Assistant Commissioner of Sales Tax, Cuttack is directed to hear and dispose of the

First Appeal pending before him within a period of three months from today.   

Before concluding, we may also record that BPCL through

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its counsel has given an undertaking to this Court that in the event of the Department

succeeding in  the  appeal  pending  before  the  Assistant  Commissioner  of  Sales  Tax,

Cuttack, it will pay the tax due with interest in accordance with the provisions of the

Orissa Sales Tax Act, 1947.   

Before concluding, we may point out that, according to the Department, the

transactions in question do not constitute PDS sales.  This question will also have to be

gone into by the Assistant Commissioner of Sale Tax, Cuttack, in the pending First

Appeal.  We express no opinion in that regard.

Pending First Appeal, however, no coercive steps to be taken.

Civil Appeal is disposed of accordingly.  No order as to costs.

                         ...................J.               (S.H. KAPADIA)

                  ...................J.                                         (B. SUDERSHAN REDDY) New Delhi, August 07, 2008.

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