M/s. Ganesh Saw Mill & Ganesh Traders State of Orissa & Ors. … v. …
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.4584 of 2017 M/s. Ganesh Saw Mill & Ganesh Traders State of Orissa & Ors. ….. Vs. ….. Petitioner Mr. Jagabandhu Sahoo, Sr. Advocate along with Ms. Kajal Sahoo, Advocate Opposite Parties Mr.Sunil Mishra, SC, CT & GST Organization CORAM: ACTING CHIEF JUSTICE DR. B.R. SARANGI MR. JUSTICE MURAHARI SRI RAMAN
Decision
ORDER 12.12.2023 Order No. 03 This matter is taken up through hybrid mode. 2. Heard Mr. Jagabandhu Sahoo, learned Senior Counsel along with Ms. Kajal Sahoo, learned counsel appearing for the petitioner and Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organization. 3. The petitioner has filed this writ petition seeking to quash the Circular No.VII-12-1-2016-Rev-Sec-CCT-17265/CT dated 16.11.2016 under Annexure-8 issued by Commissioner of Commercial Taxes, Government of Odisha, Cuttack on the ground that the same is issued without authority. The Petitioner further challenged the audit visit report in Form VAT-303 dated 22.12.2016 under Annexure-3 and notice in Form VAT-306 dated 31.01.2017 for assessment under Section 42 of the Odisha Value Added Tax Act, 2004 under Annexure-4 and also order of assessment in Form VAT-312 dated 29.06.2017 issued by Opposite Party No.4-Sales Tax Officer, Bargarh Circle, Bargarh, vide Annexure-9, which is the Page 1 of 6 result of aforesaid circular dated 16.11.2016 issued by the Commissioner of Commercial Taxes, Government of Odisha, Cuttack inter alia instructing as follows:- “In case of aduit undertaken during 2015-16, for the tax period 2013-14 and 2014-15, a. Where cases have already been settled erroneously by the Audit Officer as per the amended provisions, such cases shall be taken up for audit assessment by the Assessing Authority as per the pre-amended provision of Section 42 of the OVAT Act. Payment already made by the dealer as per the notice of the Audit Officer shall either be adjusted against the liability of the dealer or be refunded to him depending on the result of audit assessment. This should be intimated to the dealer by the Assessing Authority at the time of issuing notice for audit assessment. b. Where audit assessment for the year 2013-14 and 2014-15 has been completed and penalty equal to the amount of tax assessed has been imposed erroneously as per the amended provisions of Section 42, the Assessing Authority shall rectify (u/s 81 of the OVAT Act) the assessment order by imposing penalty equal to twice the amount of tax assessed as per the pre-amended provisions of Section 42 of the OVAT Act as already clarified by Circular No.9122/CT dtd.04.06.2016 of the CCT (Odisha) and fresh notice of demand issue accordingly. Before rectification of the assessment order, the dealer should be given an opportunity of being heard as provided u/s. 81 of the Act.” 4. Mr. Jagabandhu Sahoo, learned Senior Counsel appearing for the petitioner submitted that the Petitioner has co-operated with the Department by furnishing materials asked for during the course of assessment pertaining to the periods from 01.04.2014 to 31.09.2015. He further submitted that the Petitioner has challenged the circular dated 16.11.2016 pursuant to which the Opposite Party No.3-Sales Tax Officer (Audit), Sambalpur Range, Sambalpur has issued intimation for conduct of tax audit restricting the periods from 01.04.2014 to 30.09.2015 under the provisions of Odisha Value Added Tax Act, 2004 (for short “the OVAT Act, 2004”), the Entry Page 2 of 6 Tax Act, 1999 and the Central Sales Tax Act, 1956 (for short “the CST Act, 1956”) vide letter dated 17.11.2016 under Annexure-2. It is brought to the notice of this Court that said circular has been quashed in the case of M/s. Rajdhani Coir v. Commissioner of Commercial Taxes, Odisha, W.P.(C) No.11288 of 2018, disposed of on 04.12.2018. Mr. Jagabandhu Sahoo, learned Senior Counsel appearing for the petitioner, therefore, submitted that since the assessment order dated 29.06.2017 under Annexure-9 has been passed based on the Audit Visit Report submitted pursuant to invalid Circular dated 16.11.2016 under Annexure-8, the proceeding for assessment, being vitiated, not only the assessment order but also the Audit Visit Report is required to be quashed. 5. Mr. Sunil Mishra, learned Standing Counsel appearing for the CT & GST Organization submitted that since the assessment order dated 29.06.2017 has been passed under Section 42 of the OVAT Act restricting the period from 01.04.2014 to 30.09.2015, i.e., tax periods covering prior to coming into force the OVAT (Amendment) Act, 2015, alternative remedy is available under Section 77 of the OVAT Act. He further submitted that though initial notice for audit visit was issued in Form VAT-301 for examination of accounts in respect of tax periods from 01.04.2014 to 31.03.2016, before the proceeding is terminated, the assessing authority issued intimation dated 17.11.2016 confining the tax periods for audit from 01.04.2014 to 30.09.2015. The said intimation is to the following effect:- “To M/s. Ganesh Sawmill and Ganesh Traders, Bargarh, TIN-21281700497 Sub-Limiting the Period of Tax Audit-Regarding. Ref-Tax Audit Notice under OVAT Act, Entry Tax Act and CST Page 3 of 6 Act vide dtd.26.09.2016. this Office Issue Nos-1740, 1741 and 1742, In pursuance of Circular issued by Commissioner of Commercial Taxes, Odisha, Cuttack vide Circular No.VII-12-1- 2016-Rev Sec-CCT17265/CT dtd.16-11-2016, this is to inform you that the period of tax audit under OVAT Act, Entry Tax Act and CSt Act is hereby limited to the tax period from 01-04-2014 to 30-09-2015 instead of 01-04-2014 to 31-03-2016. Sambalpur Range, Sambalpur” Sales Tax Officer (Audit) Therefore, the learned Standing Counsel appearing for the CT & GST Organization submitted that the Audit Visit Report prepared under Section 41 of the OVAT Act has been submitted for the tax periods from 01.04.2014 to 30.09.2015 and the assessment has been undertaken based on said Audit Visit Report covering periods prior to 01.10.2015, i.e., date on which the OVAT (Amendment) Act, 2015 came into force. Hence, there is no infirmity in passing the assessment order as per the provisions as existed prior to said amendment. 6. Considering the rival submissions on perusal of record, it reveals that the assessment order has been passed on 29.06.2017 under Section 42 of the OVAT Act, 2004 for the periods from 01.04.2014 to 30.09.2015 which was based on Audit Visit Report restricting tax periods prior to aforesaid amendment. Though aforesaid circular has been quashed by this Court, the assessing authority while passing the final order of assessment has taken into account the Audit Visit Report submitted restricting the period till 30.09.2015 by issue of intimation vide Annexure-2. Thus, in the fact situation, it appears, the circular dated 16.11.2016 had no impact on the assessment order dated 29.06.2017 passed under Section 42 of the OVAT Act for the tax periods from 01.04.2014 to 30.09.2015. 7. This Court had occasion to deal with identical circumstance, Page 4 of 6 where period indicated in the notice for audit visit was sought to be rectified. In such context taking note of provisions of Section 81 of the OVAT Act which envisaged for amendment of clerical mistake or error apparent on the face of record by the Assessing Authority, the Appellate Authority and the Revisional Authority or the Tribunal. In view of said provision in Kanakdhara Mining v. Commissioner of Commercial Taxes, W.P.(C) No.19930 of 2013 vide order dated 18.03.2013, this Court rejected the contention of the Petitioner and observed as follows:- to produce “We are of the considered view that the contention raised on behalf of the Petitioner does not merit any consideration since the assessing authority has issued the impugned notice for audit visit on 24.08.2012 directing the the books of account petitioner-assessee including registers and records for the period 2005-06 to 2011-12 and any arithmetical or clerical mistake or any error apparent on the face of the record can be rectified under Section 81 of the OVAT Act. Since the assessing authority has rightly issued the corrigendum order under Section 81 of the OVAT Act, vide Annexure-7 and the notice for audit visit, vide Annexure- 7/A without any infirmity or illegality, we are not inclined to interfere with the same.” 8. In view of the above, this Court finds no infirmity in amending the impugned notice dated 26.09.2016 vide Annexure-1 wherein the authority rectified the notice limiting the tax periods for tax audit from 01.04.2014 to 30.09.2015 instead of 01.04.2014 to 31.03.2016. 9. In consequence thereof such tax audit being conducted and the assessing authority having passed assessment order under Section 42 of the OVAT Act for the tax periods from 01.04.2014 to 30.09.2015, this Court is not inclined to entertain this writ petition. However, if the Petitioner is so advised, may avail the remedy available under Page 5 of 6 the OVAT Act. 10. Accordingly, the writ petition stands disposed of granting liberty as aforesaid. (DR. B.R. SARANGI) ACTING CHIEF JUSTICE Laxmikant (M.S. RAMAN) JUDGE Signature Not Verified Digitally Signed Signed by: LAXMIKANT MOHAPATRA Designation: SENIOR STENOGRAPHER Reason: Authentication Location: HIGH COURT OF ORISSA, CUTTACK Date: 15-Dec-2023 10:17:10 Page 6 of 6