According to the Odisha Entry Tax Act of 1999, the Orissa High Court has been added to the list of “tobacco and tobacco products” as a “bidi.”
Case Title: M/s. Patel Brothers & Co., Sambalpur v. the State of Odisha
Case No.: STREV No. 29 of 2012
Coram: Dr. S. Muralidhar, CJ & Radha Krishna Pattanaik, J.
Order Authored By: Dr. S. Muralidhar, CJ.
Order Dated: 5th July 2022
Counsel for the Petitioner: Mr. S. Lal, Advocate
Counsel for the Respondent: Mr. S. Mishra, Senior Standing Counsel
Citation: 2022 (Ori) 113
The Odisha High Court ruled that ‘bidi’ falls under the definition of “tobacco and tobacco products” as defined in Entry 16, Part I of the Schedule to the Odisha Entry Tax Act, 1999 (‘OET Act’). Chief Justice Dr. S. Muralidhar and Justice Radha Krishna Pattanaik of the Division Bench observed,
“Although learned counsel for the Petitioner attempted to argue that under Entry 31, ‘cigarette and lighter’ is a separate item and thus unless there is a separate entry for ‘bidi,’ it would not be subject to entry tax under the OET Act, the Court is unable to agree. The term “tobacco and tobacco products” is broad enough to include “bidi”…”
The issue for Consideration:
Whether ‘bidi’ is included within the entry “Tobacco and Tobacco products” in item 16, Part-I of the Schedule under the OET Act?
Contention:
As the entry does not specifically mention “bidi,” according to Mr. S. Lal, counsel for the petitioner, it does not fall under the purview of the aforementioned entry. He further argued that Entry 31 treats “cigarette and lighter” as a separate item, so absent a separate entry for “bidi,” it would not be subject to entry tax under the OET Act.
Mr. S. Mishra, Senior Standing Counsel, on the other hand, pointed out that the term “tobacco products” is broad enough to include “bidi,” which is simply tobacco inserted in Kendu leaves and smoked in the rural countryside.
Court’s Observations:
The following observations made by the Tribunal were reproduced and affirmed by the Court.
“The law is well settled that entries in the Schedule are to be dealt with in accordance with common commercial parlance and trade usage. The said bidi is made from Kendu leaves and tobacco, and it is known as the poor man’s cigarette. It is a handcrafted country cigarette composed of tobacco components in rolled Kendu leaves, and the said bidis are tobacco. Although bidi does not have a direct entry in the Schedule of the O.E.T. Act, in common commercial parlance it is a tobacco product used in rural India. So, bidi is a Scheduled Goods under the O.E.T. Act, and it is eligible for a 1% entry tax, which has already been decided by both lower forums and does not require intervention by this Tribunal.”
Again, the Court flatly rejected the argument that ‘cigarette and lighter’ is a separate item under Entry 31, and thus, unless there is a separate entry for ‘bidi,’ it is not subject to entry tax under the OET Act. The Court determined that the term “tobacco and tobacco products” is broad enough to include “bidi.”
As a result, it determined that the Tribunal made no error in including bidi within the scope of the aforementioned entry. As a result, it confirmed that bidi is subject to entry tax under the OET Act.
