12% Sales Tax Applicable On Robinson Barley And Purity Barley: Orissa High Court

The division bench of Chief Justice S. Muralidhar and Justice R.K. Pattanaik has observed that if a customer went to a shop and asked for barley, such a customer would not be supplied with Robinson Barley or Purity Barley. Conversely, if the customer was to ask for Robinson Barley or Purity Barley, he would not be supplied with plain barley. The distinct commercial product "Robinson Barley" cannot be classified as "cereal".

The petitioner/assessee raised the issue of whether Robinson Barley and Purity Barley should be subject to sales tax under the Orissa Sales Tax Act, 1947 under the entry meant for cereals covered under Entry 16 List C, taxable at the rate of 4% or under the residual entry, taxable at the rate of 12%.

The Sales Tax Officer rejected the plea of the petitioner that Robinson Barley and Purity Barley 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 order was confirmed by the Orissa Sales Tax Tribunal by rejecting the petitioner's appeal.

The assessee submitted that the purchase of Robinson Barley was made inside the State of Odisha on payment of tax at the rate of 4%. While in the original assessment, the exemption was allowed, on reassessment, the STO held that "Robinson Barley is not a medicine nor is it a cereal and is exigible to tax at the last point of sale at the rate of 12%." The appeal filed by the assessee in that case was allowed, accepting the assessee's contention that Robinson Barley was barley, which was a "cereal" taxed at the first point of sale at the rate of 4%. However, the Tribunal allowed the appeal of the State, holding that Robinson Barley was not the same as barley in the form of cereal and could not be taxed at the first point of sale at 4%.

The court 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".

Case Title: Reckitt Benckiser (India) Ltd. versus State of Odisha and Others

Citation : 2022 LiveLaw (Ori) 124

Case No: STREV No. 75 of 2003, STREV 30 of 2012

Dated: 12.08.2022

Counsel For Petitioner: Senior Advocate B.K. Mahanti

Counsel For Respondent: Additional Standing Counsel Sunil Mishra

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