Orissa High Court
Case Details
ORISSA HIGH COURT: CUTTACK STREV NO. 57 OF 2014 In the matter of an application under Section 24 of the Orissa Sales Tax Act, 1947. --------------- AFR Limited, Cuttack ..… Petitioner M/s. Indian Oil Corporation -Versus- State of Orissa & Anr. ….. Opp. Parties For Petitioner : M/s. Satyajit Mohanty, D.P. Sahu and S. Das, Advocates For Opp. Parties : Mr. Sunil Mishra, Addl. Standing Counsel P R E S E N T: THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR JUSTICE M.S. RAMAN DECIDED ON : 16.03.2023 DR. B.R. SARANGI,J. M/s. Indian Oil Corporation Limited, a Government of India Undertaking under the administrative control of the Ministry of Petroleum and Natural Gas, Government of India and incorporated under the provisions of the Section 617 of the // 2 // Companies Act, 1956, has filed this STREV with a prayer to set aside the order dated 28.11.2013 passed by the Sales Tax Tribunal (Full Bench), Cuttack passed in S.A. No.633 of 2008-2009 for the Assessment Year 2002- 2003 confirming the order dated 11.12.2008 passed by the Assistant Commissioner of Sales Tax, Cuttack-I Range, Cuttack in Appeal No.AA-442/CUIE/2006-07, holding that the petitioner is neither a manufacturing concern nor sold the HSD (High Speed Diesel) or LDO (Light Diesel Oil) as its finished products; manufactured out of any raw materials and consumables, as it has paid entry tax on procurement of HSD and LDO into the State of Odisha, but has not sold any finished goods rather sold the same goods as procured and, thereby, the claim of the petitioner for setting off of the entry tax paid is not admissible. 2. The factual matrix of the case, in brief, is that the petitioner-company, being a registered dealer under the Orissa Sales Tax Act, 1947 (“OST Act, 1947” for short) having Registration Certificate No.CU-IE-683 within the jurisdiction of Sales Tax Officer, Cuttack-I // 3 // East Circle, Cuttack, was engaged in the business of refining and selling of petroleum products like Motor Spirit (Petrol), HSD, LDO, Superior Kerosene Oil, Furnace Oil, Bitumen, ATF and AV Gas etc. It sold a part of its stock of HSD to the dealers, who had given undertaking in Form-IV in terms of Item No.81 of Schedule/Rate Chart that they would use the HSD in manufacture, processing of goods for sale or in mining or in the generation or distribution of electricity at a concessional rate of tax @ 4% and a part of its stock of HSD to the dealers for resale. Thereby, the petitioner collected tax on sale of HSD @ 4% as per Item No.81 instead of 20% as per Item No.101 of the schedule. 2.1 The petitioner claimed set off of entry tax paid on the HSD against the sales tax payable on sale of HSD in terms of Note 1(b) read with Note 2(ii) of the Notification dated 31.03.2001. During the assessment under Section 12(4) of the OST Act, 1947 for the year 2002-2003, the petitioner produced the books of account with all material facts and particulars before the Assessing Authority-opposite party no.2 for making // 4 // assessment. The Assessing Authority, being duly satisfied with the books of account maintained by the petitioner, passed assessment order dated 31.01.2006 under Section 12(4) of the OST Act, 1947 allowing set off of entry tax paid on the HSD against the sale tax payable on sale of HSD. 2.2 Opposite party no.2 issued notice dated 17.06.2006 under Section 12(8) of the OST Act for reassessment of the turnover of the petitioner for the year 2002-2003 and vide letter dated 31.10.2006 communicated the reasons for reassessment that for the sale made against Form-IV as per item No.81 of the List- C of the rate chart appended to the OST Act, 1947, the petitioner is not entitled to claim set off of entry tax paid on such goods. Objecting to such allegation, the petitioner by way of written statement submitted that the said notice was issued on a mere change of opinion and the said authority lacked power, competence and jurisdiction to reopen the assessment proceeding under Section 12(8) of the OST Act, 1947. // 5 // 2.3 Pursuant to above notice, the petitioner submitted its reply on 09.11.2006 contending that there is no restriction under law in claiming set off of entry tax paid on HSD even if the HSD is sold at a concessional rate of tax @4% to the dealers who furnished declaration in Form IV to use the said HSD in manufacturing, processing or mining activities. But the Assessing Officer, on certain conjecture and surmises, without extending any reasonable opportunity of being heard and depriving the benefit of natural justice and without taking into consideration the contentions raised by the petitioner, in exercise of power under Section 12(8) of the OST Act, 1947 passed the reassessment order dated 27.01.2007 for the year 2002-2003 disallowing the claim of set off of entry tax paid on goods which were sold to the dealers for use in manufacturing, processing or mining activities against declaration in Form-IV and determined the tax payable at Rs.1,31,81,725/-. 2.4 Against the said reassessment order dated 27.01.2007 passed by opposite party no.2, the petitioner
Legal Reasoning
preferred First Appeal Case No.AA-442/CUIE/2006- // 6 // 2007 under Section 23(1) of the OST Act, 1947 before the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack. The First Appellate Authority, vide order dated 11.12.2008, dismissed the said appeal and confirmed the reassessment order dated 27.01.2007. 2.5 Aggrieved by the order dated 11.12.2008 passed by the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack, the petitioner preferred Second Appeal No.663/2008-09 before the Odisha Sales Tax Tribunal (Full Bench), Cuttack, along with a stay revision petition before the Commissioner of Sales Tax, Orissa, Cuttack praying for full stay of the demanded amount till disposal of the second appeal. The Tribunal, vide order dated 28.11.2013, confirmed the order passed by the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack in the First Appeal for the Assessment Year 2002-2003. Hence, this revision. 3. In the above backdrop of the case, the following questions of law arose for determination in this revision application:- // 7 // (i) Whether fresh assessment under Section 12(8) of the OST Act is permissible taking into same turnover which was subject-matter for consideration in assessment under Section 12(4) and such reassessment is vitiated on account of “change of opinion”? (ii) Whether the reassessment order as well as appellate orders are correct in disallowing set off of entry tax paid on the goods which were sold to the dealers at concessional rate of tax @ 4% as per Entry 81 of schedule appended to Notification dated 31.03.2001 issued under Section 5(1) of the OST Act? (iii) Whether the Sales Tax Tribunal, Orissa is justified in concluding that the petitioner company is not entitled for set off of entry tax, even though at Paragraph-9 held that “though we find admissibility of set off of entry tax paid against the amount of tax payable on sales of goods”? 4. To answer effectively the questions, as formulated above, it is of relevance to have a glance on the notification dated 31.03.2001 under Annexure-1 // 8 // issued by the Government of Odisha in the Finance Department. Item No.81 of the schedule of the said notification, being relevant for the purpose, is extracted hereunder:- liquor (IMFL) or any “81. Goods of the class or classes other than paper, petrol, diesel oil, air conditioner, furniture, carpet, telephones, India made liquor foreign specified in the certificate of registration of the registered dealer purchasing the goods as being intended for use by him in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power subject to the production of the true declaration by the purchasing registered dealer or his authorised agent in form -IV. Explanation- This entry is also applicable for purchases through leasing or works contract or hire purchases. “DECLARATION FORM-IV (see serial 81) I/We ---------------hereby declare that the goods purchased by me/us in cash memo/bill NO.---- dated the ------from -----shall be used in the manufacturer/processing of goods for sale/in mining/generation or distribution of electricity or any form of power. Dealer/Authorised Agent” Similarly, Item No.101 of the schedule of the said notification under Annexure-1 reads as follows:- 101 Light Diesel Oil and High Speed Diesel Twenty per cent // 9 // 5. Note-1 and Note-2 appended to the said notification read as follows: “Note-1. a. The amount of tax payable and respect of good specified in Sl. Nos.1, 11, 12, 13, 14, 17, 28, 30, 56, 58, 65, 68, 69, 76, 87, 97, 107, 119, 127, 134, 136, 138, 156, 180, 181 and 183 shall be reduced by the amount of Orissa Sales Tax paid by him on raw material and consumables subject tax on purchase turnover and/or tax collected from him by the selling dealer separately on the body of the bill in respect of sale of raw materials and consumable subject to tax on sale turnover directly used in manufacture of such goods. to Explanation:-Building materials for construction of Factories and allied construction, Office equipments, Packing materials, vehicle and such other materials which are not directly used in manufacturer shall not be treated as raw material or consumable for the purpose of allowing set of. The amount of tax payable in respect of b. goods specified in part –III of the Schedule to the Orissa Entry Tax Act, 1999 as well as in Sl. Nos. 21, 32, 46, 74, 101, 108 and 155 shall be reduced by the amount of Orissa Entry Tax paid on such goods under Orissa Entry Tax Act, 1999 and the rules made thereunder. Note 2.: The set off of tax as provided in Note-1 above shall be regulated subject to the following conditions: i. The amount of set off claimed shall be limited to the OST payable on sale of // 10 // ii. iii. finished products manufactured out of such raw materials and consumables. The amount of set off claimed against payment of tax under the Orissa Entry Tax Act, 1999 shall be limited to the OST payable on sale of such goods. In respect of goods exigible to tax on sale turnover the amount of O.S.T. realized separately from the dealer on the body of the purchase invoice in respect of the purchases from the registered dealers during a particular year shall be eligible for computation of the amount of set off to which the dealer shall be entitled, during the same year. It is the responsibility of the dealer for proper custody of those purchase facilitate invoices verification by Sales Tax Officer”. to 6. May it be noted, the exercise of power under ‘Revision’ is an act of examining again in order to remove any defect or grant relief against the irregular or improper exercise or non-exercise of jurisdiction by a lower court. In a revision the revising authority is not bound to examine the facts for itself but is entitled to give its decision on points of law alone. The High Court can interfere in cases where the Tribunal has: (i) misunderstood the statutory language; (ii) its findings are based on no evidence; (iii) if its findings are inconsistent with the evidence or contradictory to it; // 11 // (iv) if it has acted on material partly relevant or partly irrelevant; (v) where its conclusions drawn are based and imagination, surmises on conjectures; (vi) if its findings are recorded on non- application of mind; (vii) its findings are based on no supporting evidence; (viii) the findings are perverse; and/or they are returned without due consideration of matters relevant; and (ix) improperly excluded evidence; In CIT Vrs. Scindia Steam Navigation Co. Ltd., AIR 1961 SC 1633 it has been laid down as follows:- “The result of the above discussion may thus the summed up: 1) when a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order; (2) when a question of law is raised before a tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with it, and is therefore, one arising out of its order; 3) when a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order; 4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its // 12 // order notwithstanding that it may arise on the findings given by it.” In the case of ‘revision’, the revisional authority has no power to reassess and re-appreciate the evidence unless the statute expressly confers on it that power. 7. There is no dispute that the petitioner- company is engaged in sale of petroleum products such as MS, HSD, SKO, Lubricants, Furnace Oil, LDO, Bitumen etc. In addition, it also effects purchase of petrol, diesel and SKO from other marketing companies like Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation. It also operates its business through the different depots inside the State of Odisha like Rourkela, Balasore, Berhampur, Cuttack, Sambalpur, Jatni, Paradeep TMI, Jeypore and Bhubaneswar. On receipt of notice from the assessing authority issued under Section 12(4) of the OST Act, 1947, the petitioner produced the documents for the year 2002-03 and on verification it was found that for the year 2002-03 the petitioner received petroleum products from all sources including purchasing from // 13 // other marketing companies and filed return to that extent. The petitioner claimed to have effected sale of Petrol, HSD and LDO amounting to Rs.1,31,81,725/- on the concessional rate of 4% as sales tax on the strength of declaration furnished by purchasing manufacturers in Form-IV. It also claimed set off of an amount of Rs.6,63,25,470.00 and on the basis of return filed by the petitioner, it was found that under the Entry Tax Act for the year 2002-03 it had disclosed 387331.119 kl of HSD and 20110.129 kl. Of LDO and out of that it had effected sale of 11146.000 kl. of HSD in course of inter-State trade and commerce and 42504.370 kl. of HSD to other Marketing Companies within the State of Odisha. 8. The petitioner was taxed @ 4% in the assessment order passed by the Assessing Authority under Section 12(4) of the OST Act, 1947. But while making reassessment under Section 12(8), the Assessing Officer changed his opinion and while changing his opinion in reassessment, there must be materials de hors the assessment record. The apex Court in Maharaj Kumar Kamal Singh v. The Commissioner of Income // 14 // Tax, Bihar and Orissa, AIR 1959 SC 257 held that the materials already determined in the original assessment proceeding cannot be further taken up and cannot be a valid reason for reassessment. Therefore, reopening of the assessment under Section 12(8) of the OST Act is an outcome of mere change of opinion and is not based on substantial information. The transaction being a part of the original assessment order passed under Section 12(4) of the OST Act the same could not have been reopened in the name and style ‘reassessment under Section 12(8) of the OST Act. It is made clear that Section 12(8) of the OST Act lays down that the jurisdictional condition precedent for re-opening of the assessment is that the formation of the opinion of the Assessing Officer that the turnover has escaped assessment should be on the basis of “any reasons”. 9. Perusal of Assessment Order dated 31.01.2006 passed under Section 12(4) of the OST Act reveals that the Assessing Officer had allowed set off of entry tax against the sales tax payable on the turnover of sales subjected to tax at concessional rate of tax as per // 15 // Entry 81 on the strength of declaration in Form IV. For better appreciation the following is extracted from said Assessment Order:- of the taxable turnover “*** Out of Rs.1,31,81,72,472/- (sale against Form IV) is taxed @ 4%, Rs.1,07,65,00,465.00 (sale of SKO, FO, etc.) is taxed @ 4%, Rs.13,01,66,451/- (Bitumen) is taxed @ 8%, Rs.24,59,30,963.00 (sale of lubricants and wax) is taxed @ 12% and Rs.6,89,22,68,475 is taxed @ 20%. ***” In the re-assessment Order dated 27.01.2007 passed under Section 12(8) of the OST Act it has been determined as follows: the gross “*** Accordingly turnover at Rs.13,79,11,93,546.00. After allowing deduction of Rs.1,90,17,42,027.00 towards OSTC/SCC the taxable turnover of the dealer is determined at Rs.9,66,30,38,826.00. OST @ 4% (Form IV on Rs.1,31,81,72,472.00, on on Rs.1,07,65,00,465.00, 13,01,66,451.00, @ 12% on 24,59,30,963.00 and @ 20% on 6,89,22,68,475.00 calculates at Rs.1,51,41,65,644.00. Surcharge @ 1% on tax due also calculates at Rs.15,14,16,564.00 and allowed set off towards payment of ET for an amount of Rs.4,44,08,106.00. ***” 4% 8% @ @ From the aforesaid, it is crystal clear that same turnover which was subject-matter of original assessment under Section 12(4) has been considered in the proceeding under Section 12(8) in the context of set off of entry tax paid against sales tax liability. This being // 16 // a clear case of “change of opinion” is not permissible under law. 10. A three-Judge Bench of the Supreme Court of India in the case of State of Uttar Pradesh & Ors. Vrs. Aryaverth Chawl Udyog & Ors., (2015) 17 SCC 234 culled out the following fact:- “9. The assessing Authority issued a notice under Section 21(2) of the Act to the assessee to show cause as to why should the claim of deduction of the purchase tax as paid on purchase of paddy, within the State of Uttar Pradesh, from the tax liability as computed on the inter-State sales of rice manufactured from such paddy not be inquired into and an order of reassessment ought not be passed accordingly, dated 26.03.2008. 10. The assessing Authority in its re-assessment order, dated 31.03.2008, rejected the claim of deduction of purchase tax already paid on the purchase of paddy within the State of Uttar Pradesh and created a demand of Rs.72,408/- the demand under original in addition assessment order. However, keeping in view the pendency of writ petition before the High Court, the demand notice was not enforced.” to After reviewing legal position as set forth in earlier cases, the apex Court in the aforesaid reported case has succinctly restated the law on the point of “change of opinion” in the context of reassessment as follows:- // 17 // “29. The standard of reason exercised by the Assessing Authority is laid down as that of an honest and prudent person who would act on reasonable grounds and come to a cogent conclusion. The necessary sequitur is that a mere change of opinion while perusing the same material cannot be a “reason to believe” that a case of escaped assessment exists requiring assessment proceedings to be reopened. (See: Binani Industries Ltd., Kerala vs. Assistant Commissioner of Commercial Taxes, VI Circle, Bangalore and Ors., (2007) 15 SCC 435; A.L.A. Firm v. CIT, (1991) 2 SCC 558). If a conscious application of mind is made to the relevant facts and material available or existing at the relevant point of time while making the assessment and again a different or it would divergent view tantamount to “change of opinion”.If an Assessing Authority forms an opinion during the original assessment proceedings on facts and subsequently finds it to be erroneous; it is not a valid reason under the law for re- assessment. Thus, reason to believe cannot be said to be the subjective satisfaction of the assessing Authority but means an objective view on the disclosed information in the particular case and must be based on firm and concrete facts escaped that assessment. the basis of material reached, income some has is 30. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the “change of opinion” and the material present before the assessing Authority. Discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to reinitiate proceedings under Section 21(1) of the Act on the basis of change in subjective opinion (CIT v. Dinesh Chandra H. Shah, (1972) 3 SCC 231; CIT v. Nawab Mir Barkat Ali Khan Bahadur, (1975) 4 SCC 360).” 11. This Court has, in the case of Kalinga Institute of Industrial Technology (KIIT), // 18 // Bhubaneswar, Vrs. Assistant Commissioner of Income Tax Exemption Circle, Bhubaneswar &
Decision
Others, W.P.(C) No. 4440 of 2022, disposed of vide Order dated 21.07.2022, observed as follows:- *** Further the original assessment order “7. in a tabular form sets out the cost of medicines and the selling price of the medicines as was done in identical terms in the reasons for reopening the assessment. This is a text book example of reopening of assessment being made on exactly that were the same materials available to the AO in the first instance. 8. This is precisely what has been disapproved by the Supreme Court of India in its decision in Commissioner of Income Tax v. Kelvinator of India Ltd., (2010) 320 ITR 561(SC)where it observed as under: a to give “.....post-1st April, 1989, power to reopen is much wider. However, one needs schematic interpretation to the words “reason to believe” failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of “mere change of opinion”, which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfillment of certain pre-conditions and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the grab of reopening the assessment, review would take place. One must treat the concept of “change of opinion” as an in-built test to check // 19 // abuse of power by the Assessing Officer.” 9. This Court too has in similar circumstances, where there was a mere change of opinion on the same materials, set aside the reassessment notice and the consequential assessment order by its judgment dated 15th February, 2022 in Writ Petition (Civil) No. 25229 of 2017 (M/s. Tuff Tubes (Orissa) Pvt. Ltd. v. The Deputy Commissioner of Income Tax, Corporate Circle- 1(2), Bhubaneswar).” 12. In the matter of Sri Jagannath Promoters Vrs. Deputy Commissioner of Income Tax, 2021 SCC OnLineOri 1769 = (2022) 440 ITR 192 = (2022) 324 CTR 233 it has been held as follows:- the same material viz., “13. In the present case, the reasons for reopening the assessment do not point to any new material that was available with the Department. What appears to have happened is the accounts that produced by the Assessee were re-examined and a fresh opinion was arrived at by the Opposite Party No.1 regarding the claim of the deduction of Rs.48,183/- on account of the loss of sale of assets. This had already been disclosed in the detailed accounts filed by the Assessee. In fact, a questionnaire had been issued by the AO in the course of the original assessment proceedings to the Assessee which was responded to by the Assessee. In other words, there was conscious application of mind by the AO to the said materials. Therefore, the inevitable conclusion as far as the present case is concerned is that the ‘reason to believe’ of Opposite Party No.1 that income for the AY in question had escaped assessment is based on a mere ‘change of opinion’. 14. In this context, the following observations of the Delhi High Court in Jindal Photo Films Ltd. v. // 20 // the Deputy Commissioner ofIncome Tax (1998) 234 ITR 170 (Del) are relevant: “Following the settled trend of judicial opinion and the law laid down by their Lordships of the Supreme Court time and again different High Courts of the country have taken the view that if an expenditure or a deduction was wrongly allowed while computing the taxable income of the Assesses, the same could not be brought to tax by reopening the assessment merely on account of subsequently the assessing officer forming an opinion that earlier he had erred in allowing the expenditure or the deduction.” “Though he has used the phrase in his order, ‘reason admittedly, between the date of orders of assessment sought to be reopened and the date of forming of opinion by the ITO nothing new has happened. There is no change of law. No new material has come on record. No information has been received. It is merely a fresh application of mind by the same assessing officer to the same set of facts.”” to believe’ 13. The apex Court in the case of Income Tax Officer Vrs. Techspan India Ltd. & Anr., (2018) 6 SCC 685 has dealt with the law on the point of “change of opinion” in the context of reassessment to the following effect: “16. To check whether it is a case of change of opinion or not one has to see its meaning in literal as well as legal terms. The word change of opinion implies formulation of opinion and then a terms of assessment change proceedings, it means formulation of belief by an assessing officer resulting from what he thinks thereof. In // 21 // is the basis of is a result of on a particular question. It understanding, experience and reflection. *** 18. Before interfering with the proposed re- opening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed re- assessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a given aspect sought to be examined in the re-assessment proceedings.” 14. The expression “change of opinion” has been explained by this Court in the case of Bharat Petroleum Corporation Ltd. Vrs. Sales Tax Officer, (2012) 52 VST 137 (Ori), wherein it has been laid down as follows: is indirect tax. It means, “17. Before proceeding further, it is necessary to the meaning of making know what assessment on ‘change of opinion’ under direct or in respect of a particular income/transaction if the Assessing Officer after application of mind, takes a view that the particular goods or income is not liable to tax and completed the assessment, reopening of said assessment is not permissible by mere change of opinion of the Assessing Officer to levy tax on such goods or income. 18. The Hon’ble Supreme Court in the case of Binani Industries Ltd. vs. Asst. Commissioner of Commercial Taxes, [2007] 6 VST 783 (SC), held is not permissible by mere change of opinion of the that reopening of assessment // 22 // Assessing Officer. Merely because the Assessing Officer changes his opinion that cannot have any effect on the assessment which has been completed on the basis of the view taken on turnover considered in the earlier assessment.” 15. Therefore, taking a cue from the above, it is to be considered whether the petitioner is entitled to set off entry tax paid against tax payable for sale of goods. Both the First Appellate Authority and the Second Appellate Authority have come to the conclusion that the petitioner, having dealt with the item(s) mentioned in Entry No.101 and sold said item(s) against declaration in Form IV at concessional rate of tax, is not entitled to get set off of entry tax paid against the amount of tax payable for sale of goods. The Item No.101 deals with the general provision, so far as HSD and LDO are concerned, and for that the dealer is liable to pay tax @ 20%. There is no dispute on that. But here is a case where the petitioner is carrying on business in HSD and LDO, which is used within the State. 16. There is no iota of doubt that the petitioner claims concessional rate of 4% tax on the strength of Form-IV. The transaction which was done by the // 23 // petitioner with the others, being on the strength of Form-IV, set off was granted to the petitioner. The assessment order issued by the Assessing Officer under Section 12(4) is very clear to that extent, but reassessment made under Section 12(8) and confirmation thereof made by the First Appellate Authority and the Second Appellate Authority cannot be sustained in the eye of law. 17. In Indian & Eastern Newspaper Society, New Delhi v. Commissioner of Income Tax, New Delhi, (1979) 4 SCC 248 and Commissioner of Income Tax, Delhi v. Kelvinator of India Limited, (2010) 2 SCC 723, the apex Court, considering the meaning of “any reasons”, held that “any reasons” implies specific and concrete information from an external source and therefore, it cannot include an audit or other report which is prepared within the Department by the tax authorities. Otherwise it would be possible for the authorities to reopen an assessment on the basis of the change of opinion, in which event the finality of the completed assessment will lose all sanctity and integrity. // 24 // Therefore, the reopening of the assessment is based on the investigation report of the tax authorities themselves and is, therefore, founded on nothing but a mere change of opinion. As a consequence thereof, the order passed by the Assessing Authority under Section 12(8) for reassessment has no justification in view of law laid down by the apex Court in Kelvinator of India Limited (supra) followed by Nava Bharat Ferro Alloys v. State of Orissa, (2010) 31 VST 319 (Ori.). Therefore, the formation of opinion in the reassessment under Section 12(8) of the OST Act cannot have any justification and while forming such opinion, as it appears from the records, no opportunity of hearing to the petitioner was given in compliance of the principles of natural justice. 18. It is also not in dispute that the petitioner- company has paid entry tax on procurement of HSD and LDO into the State of Orissa but has not sold any finished goods rather sold the same goods as procured. On perusal of the assessment order under Section 12(4) of the OST Act, it is made clear that the Assessing // 25 // Authority has taken note of the fact that HSD and LDO, which have been utilized by different companies by furnishing the Form-IV, the same has been taken note of and assessment thereon has been made by the Assessing Authority. The goods in question have been sold by the petitioner against declaration in Form-IV furnished by the purchasing manufacturers; however, the concessional rate of tax is not available in respect of such goods, namely, HSD & LDO as they fall within the exclusion clause “other than….. diesel oil” as per Entry- 81 of List-C. Therefore, obviously the petitioner is liable to pay tax @ 20% as per Entry-101, ibid. In such eventuality, the petitioner is liable to discharge its liability by availing set off of entry tax paid. The issue of set off being taken into consideration while finalizing assessment under Section 12(4) of the OST Act, on account of “change of opinion” the reassessment under Section 12(8), ibid. is not legally tenable. 19. In Associated Cement Company v. State of Bihar, (2004) 137 STC 389 (SC), the apex Court held that on mere change of opinion, set off as claimed by the // 26 // petitioner is not admissible and is violative of the principles of natural justice. As a consequence thereof, the reassessment made by the Assessing Authority dated 21.01.2007 and relying upon the reasons assigned in the reassessment order, the appellate authority has proceeded with the matter, which cannot also be sustained in the eye of law. 20. The State Government, while enacting and incorporating Note-1(b) of the List C of the Rate Chart by way of notification dated 31.03.2001, made it clear that the claim of set off of entry tax would be available sales tax payable for sale of HSD being covered under Item No.101 of the Schedule/Rate Chart. The legislature has not imposed any restriction/embargo on application of Note-1(b) on the covered items, namely HSD etc. Thereby, while reassessing under Section 12(8), the Assessment Authority, and while confirming the order of reassessment, the First Appellate Authority as well as the Tribunal have not taken note of the fact that Note- 1(b) read with Note-2 of the notification dated 31.03.2001 in no uncertain terms, allows set off of entry // 27 // tax paid on HSD against the sales tax payable. As a consequence thereof, the statutory allowance of set off cannot be denied to the petitioner on the ground that the petitioner had sold a part of its stock of HSD at a concessional rate of 4% against submission of declaration in Form-IV. 21. Undisputedly, HSD is one of the covered goods under Note-1(b) and, thereby, the petitioner is statutorily entitled to claim set off of entry tax against sales tax payable on sale of HSD. As the State Government has not imposed any restriction/limitation on the claim of set off of entry tax on the covered items, the reassessment made by the Assessing Authority under Section 12(8) and confirmation made thereof by the First Appellate Authority and also the Tribunal denying the benefit of set off cannot be sustained in the eye of law. The benefit statutorily permissible, vide notification dated 31.03.2001 issued by the Government, cannot be denied/disallowed without considering such notification in proper perspective. Therefore, the Assessing Officer, the First Appellate Authority and the // 28 // Tribunal have not considered the Note-1(b) of the notification dated 31.03.2001 in proper perspective when the dealer is statutorily required to make sales of HSD at the concessional rate against declaration in Form-IV and in such event Note-1(b) of the notification dated 31.03.2001 would be redundant. As such, there cannot be any unreasonable, arbitrary and discriminatory classification made by the authority, which will be hit by Article 14 of the Constitution of India. 22. On the basis of aforesaid analysis, the question no.(i) is answered in the negative, i.e., in favour of the dealer and against the department. So far as question nos.(ii) and (iii) are concerned, they are not specifically answered as this Court holds the re- assessment under Section 12(8) of the OST Act is impermissible in law. 23. As a consequence thereof, the order dated 28.11.2013 passed by the Orissa Sales Tax Tribunal (Full Bench), Cuttack in S.A. No.663/2008-09 under Annexure-6 confirming the order dated 11.12.2008 // 29 // passed by the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack in Appeal No.AA- 442/CUIE/2006-07 in Annexure-4 and the reassessment order under Section 12(8) of the OST Act dated 27.01.2007 under Annexure-3 passed by the Assessing Officer disallowing the set off of entry tax to the petitioner, which comes under the purview of the notification dated 31.03.2001, cannot be sustained in the eye of law and, hence, the orders are set aside. 24. As a consequence thereof, this revision is allowed, but there shall be no order as to costs. (DR. B.R. SARANGI) JUDGE M.S. RAMAN, J. I agree. (M.S. RAMAN) JUDGE Orissa High Court, Cuttack The 16th March, 2023, Alok