The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 22534 of 2014 M/s. KAY PAN SUGANDHA PRIVATE LTD. ….. The Joint Commissioner of Sales Tax , Sambalpur Range Vs. Petitioner MR. R.P. Kar, Sr. Advocate along with Mr. Sriman Arpit Mohanty, Advocate Opposite Party Mr. Sunil Mishra, Standing Counsel for Revenue CORAM: ACTING CHIEF JUSTICE DR. B.R.SARANGI MR.JUSTICE MURAHARI SRI RAMAN Order No. 10.
Decision
ORDER 16.01.2024 This matter is taken up through hybrid mode. 2. Heard Mr. R.P. Kar, learned Senior Counsel appearing along with Mr. S.A. Mohanty, learned counsel for the Petitioner and Mr. Sunil Mishra, learned Standing Counsel appearing for the Revenue. 3. The sole question raised before this Court is, whether the assessment framed under section 9C of the Odisha Entry Tax Act, 1999 raising total demand of Rs.1,44,35,722/- inclusive of tax, interest and penalty pertaining to the periods 01.04.2011 to 31.03.2013 vide order 08.08.2014 pursuant to suggestion made in the Audit Visit Report dated 18.07.2013 to raise a demand of Rs.1,94,033/-(tax), Rs.15,670/-(interest) and Rs.2,07,740/- (penalty) is based on the recommendation of the audit report. 4. Mr. R.P. Kar, learned Senior Counsel appearing along Page 1 of 5 with Mr. Sriman Arpit Mohanty, learned counsel for the Petitioner contended that if the assessment under Section 9C of the Odisha Entry Tax Act, 1999 has been made on the basis of the audit visit report, the assessing officer could not have gone beyond the objections/observations made in the said audit visit report. He brought to our notice paragraph-5 of the counter affidavit, wherein it has been mentioned that the assessing authority has, relying on the statute, as per Section 2(j), held that purchase value should be inclusive of Value Added Tax and had not utilized any other materials beyond the AVR. The purchase value is determined from the returns and invoices, as produced during the time of audit/assessment. As such, the assessing authority has completed the assessment as per the provisions contained in Section 9-C (3) of the OET Act and has not used any foreign material to complete the assessment. Apart from the same, it is also contended that the assessing authority has verified the sale invoices, which were also verified during the course of audit. Therefore, the assessing authority, while determining the purchase value, has not utilized any other materials beyond the AVR. 5. As it appears, the revenue authority has blown hot and cold at the same time. Reason being, if the assessing authority has relied upon the audit visit report and issued notice for assessment invoking provisions under section 9C of the Act, then question of referring to Section 2(j) for the purpose of assessment thereunder does not arise, because it amounts to taking into consideration foreign materials, while making such assessment. 5.1. Reliance is placed by Mr. Kar, learned Senior Counsel Page 2 of 5 appearing for the petitioner on the judgment of this Court in the case of M/s Bhushan Power and Steel Ltd. v. State of Orissa, (2012) 47 VST 466 (Ori). In the said judgment, this Court framed questions no.(i) and (iii) in paragraph-7 of the said judgment and answered the same in pagraph-10 of the judgment that there was no scope for the assessing authority to utilize any materials other than the materials available in the audit visit report while making the audit assessment under Rule 12 (3) of the CST (O) Rules read with Section 42 of the OVAT Act. 5.2. In an identical matter dealing with assessment order under Section 9C of the OET Act, this Court, in the case of M/s.Trupti Foods Pvt. Vs. Sales Tax Officer, W.P.(C) No.17527 of 2013, vide order dated 05.12.2016 observed that <Law is well settled that the audit assessment has to be completed on the basis of materials available in the Audit Visit Report and there was no scope for the assessing authority other than the materials available in the said Report while making the audit assessment=. In Balaji Tabacco Store vrs. Sales Tax Officer, (2015)81 VST 170(Ori), it has been held that, <under Section 42 of the OVAT Act, audit assessment has to be completed on the basis of the materials available in the audit visit report. There was no scope for the assessing authority to utilize any material other than the materials available in the audit report while making the audit assessment=. 6. Since the question of law has already been answered, this Court is of the considered view that if any assessment is made on the basis of the recommendation made in the audit visit report, then the assessing authority cannot go beyond the materials available in the audit report to make an assessment. As Page 3 of 5 it is admitted that the assessing authority has resorted to the provisions contained under Section 2 (j) while undertaking assessment under Section 9C of the OET Act, it has travelled beyond the audit visit report, which cannot be sustained in the eye of law. 7. Mr. R.P. Kar, learned Senior Counsel for the Petitioner also contended that the question involved in this writ petition has already been decided in the case of M/s.Sarala Project Works Pvt. Ltd. Vs. Dy. Commissioner of Sales Tax, Mayurbhanj Circle & another (W.P.(C) No.5127 of 2016 disposed of on 05.01.2024). Therefore, this writ petition may be disposed of in terms of the observation and direction issued in the said writ petition. 8. Mr. Sunil Mishra, learned Standing Counsel appearing for the revenue contended that the question involved in this writ petition has been examined in the case of M/s.Sarala Project Works Pvt. Ltd. (supra) and other decisions mentioned above. Therefore, this matter may be disposed of in terms of the said decision. 9. Having heard learned counsel for the parties, since the assessing authority travelled beyond the materials available in the audit report, this Court is of the considered view that the issue involved in this writ petition is concerned by the ratio decided in the case of Bhusan Power & Steel Ltd. (supra) and other cases referred to and relied on by the counsel for the petitioner. But fact remains if any other additional aspect is found other than what is observed in the audit visit report, there is no bar on the part of the assessing authority to proceed against the assessee in accordance with law. Page 4 of 5 10. In view of the above, the writ petition stands disposed of in terms of the observation and direction issued in the case of Bhushan Power & Steel Ltd. (supra) as well as M/s.Sarala Project Works Pvt. Ltd. (supra). (DR. B.R. SARANGI) ACTING CHIEF JUSTICE (M.S. RAMAN) JUDGE Aswini Signature Not Verified Digitally Signed Signed by: ASWINI KUMAR SETHY Designation: PA(SECRETARY-IN-CHARGE) Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 17-Jan-2024 11:13:34 Page 5 of 5