Orissa High Court
Case Details
ORISSA HIGH COURT: CUTTACK STREV NO. 24 OF 2023 In the matter of a revision under Section 80 of the Orissa Value Added Tax Act, 2004 arising out of order dated 27.09.2023 passed in S.A. No. 79(V) of 2021 by the Odisha Sales Tax Tribunal, Cuttack confirming the order dated 27.09.2021 passed by the Joint Commissioner of Sales Tax (Appeal), Territorial Range, Cuttack-II, Cuttack as well as the order dated 29.06.2020 passed by the Assessing Authority. --------------- AFR M/s Maharana Supply & Co. ..… Petitioner -Versus- State of Odisha ….. Opp. Party For petitioner : M/s. T.K. Satapathy, R.K. Jena, K.R. Satapathy and D. Hazra, Advocates. For opp. party : Mr. Sunil Mishra, Standing Counsel (Revenue) P R E S E N T: THE HONOURABLE DR. JUSTICE B.R.SARANGI AND THE HONOURABLE MR. JUSTICE G. SATAPATHY DECIDED ON : 26.04.2024 DR. B.R. SARANGI,J. The petitioner-M/s Maharana Supply and Company, which is registered under the Companies Act, has filed this revision to set aside the order dated Page 1 of 9 // 2 27.09.2023 passed by the Odisha Sales Tax Tribunal, Cuttack in S.A. No. 79 (V) of 2021 and further seeks to decide the question of law formulated by it in paragraph-5 of the revision petition. 2. The factual matrix of the case, in brief, is that the petitioner-company is a registered dealer under the OVAT Act bearing TIN No. 21431300241 and is engaged in the business of round logs, size wood, saw dust and
Legal Reasoning
firewood etc. on wholesale cum retail basis at Kotasahi, Tangi, Cuttack and most of the purchases are being made by it from Odisha Forest Corporation Ltd. The petitioner also purchases from other registered dealers from Odisha and outside State having valid TIN and against tax invoices. The petitioner has included all the purchases and sales as per the usual trade practice and have been maintaining proper books of account and filed VAT returns in Form 201 under Sub-rules (1) of Rule 34 of the Odisha Value Added Tax Rules without any discrepancy for the period from 01.10.2015 to 30.06.2017. During the period from 01.10.2015 to 30.06.2017, the assessment order was passed ex-parte Page 2 of 9 // 3 on 29.06.2020 in Form VAT 312 without extending due and proper opportunity to the petitioner to explain the transaction. Aggrieved by such order of assessment, the petitioner preferred First Appeal bearing No.AA/07/ OVAT/CUIIR/2020-21 under Section 77 of the OVAT Act for the period from 01.10.2015 to 30.06.2017, but the Joint Commissioner of Sales Tax (Appeal), Territorial Range, Cuttack-II, vide order dated 27.09.2021, dismissed the said First Appeal. As the First Appellate Authority, without examining the points of law and other evidences, dismissed the appeal in a mechanical manner, by confirming the order of assessment, the petitioner preferred Second Appeal, as against the order of the First Appellate Authority as well as the order passed by the Assessing Authority, before the Odisha Sales Tax Tribunal, Cuttack. But the Tribunal, without appreciating the facts of the case and points of law raised, dismissed S.A. No. 79 (V) of 2021, vide order dated 27.09.2023, by confirming the orders of the First Appellate Authority as well as the Assessing Authority. Hence, this revision. Page 3 of 9 // 4 3.
Legal Reasoning
Mr. T.K. Satapathy, learned counsel appearing for the petitioner contended that though the Assessing Authority passed the ex-parte order on the basis of audit visit report, but there are other materials available on record, including Annexure-6 dated 19.05.2020, which fortify that audit visit report and assessment for the periods from 01.04.2012 to 31.03.2014 and from 01.10.2015 to 30.06.2017 under OVAT Act are not available. It is contended that the Assessing Officer passed the assessment order without giving opportunity of hearing to the petitioner and, more so, the ex-parte order was passed relying upon the audit visit report, which is a non-existent document. Thereby, the order passed by the Assessing Authority and the confirming orders passed by the First Appellate Authority as well as the Second Appellate Authority, being without any application of mind, are liable to be quashed. 4. Mr. Sunil Mishra, learned Standing Counsel appearing for the Revenue fairly submitted that there is inadvertent mistake on the part of the Assessing Authority. It is contended that though the Assessing Page 4 of 9 // 5 Authority made assessment under Section 43 of the OVAT Act, but, by relying upon the statement of audit visit report, he has committed gross mistake. Therefore, the error, which has been committed, should have been taken into consideration and the same should not have been ignored, as the entire assessment has been done in accordance with the provisions contained under Section 43 of the OVAT Act. It is further contended that the error committed by the Assessing Authority has neither been rectified nor the same has been clarified by the First Appellate Authority as well as the Second Appellate Authority, rather, they have confirmed the mistake crept in the order passed by the Assessing Authority. As a result thereof, the effect of the order passed by the Assessing Authority has been affected, in absence of correction of the mistake committed at the level of the Assessing Authority. It is further contended that in paragraph-5 of the revision though grounds have been set out, but none of the grounds can satisfy that the orders impugned are revisable. Consequentially, dismissal of the revision is sought for. Page 5 of 9 // 6 5. This Court heard Mr. T.K. Satapathy, learned counsel appearing for the petitioner and Mr. Sunil Mishra, learned Standing Counsel appearing for the Revenue in hybrid mode. Since the opposite party- Revenue has already entered appearance and, as such, prima facie this Court is satisfied with regard to the progress of the case, without issuing notice in the matter and with the consent of learned counsel for the parties, this revision is being disposed of finally at the stage of admission. 6. Having heard learned counsel for the parties and after going through the records, this Court finds the order of assessment has been passed by the Assessing Authority under Annexure-1, wherein column-3 indicates that the assessment has been made under Section 43 of the Odisha Value Added Tax, 2004 and column-11 indicates that interest has been levied under Section “………” and column-12 indicates that the penalty has been levied under Section 43 (2) of the OVAT Act for an amount of Rs.1,27,176/-. Therefore, initiation of proceeding against the petitioner is culminated under Page 6 of 9 // 7 Section 43 of the OVAT Act, 2004. As such, penalty has been imposed under Section 43 (2) of the OVAT Act, 2004, as has been indicated in column-12 of the order of assessment passed by the Assessing Authority. But on perusal of the assessment order, it appears that the Assessing Authority in the order impugned has stated as “Thus the dealer is avoiding assessment deliberately.
Decision
Therefore, the case is disposed of ex-parte on the basis of Audit Visit Report and other materials available in the record.” Therefore, it is well established that the Assessing Authority has disposed of the matter on ex- parte and on the basis of the audit visit report. So far as audit visit report is concerned, reliance has been placed on Annexure-6 dated 19.05.2020, wherein the Dy. Commissioner of CT & GST, Cuttack-II Circle, Cuttack informed the petitioner to the following effect:- “On verification of official records in case of above named dealer, it is seen that audit visit report and assessment for the period 01.04.2012 to 31.03.2014 and 01.10.2015 to 30.06.2017 under OVAT Act is not available.” Page 7 of 9 // 8 7. Therefore, due to non-availability of audit visit report, the Assessing Authority could not have passed the order of assessment relying on the audit visit report and other materials available on record. As such, the order of assessment has been passed ex-parte and without affording opportunity of hearing to the petitioner. Thereby, gross error has been committed by the Assessing Authority while passing the order impugned under Annexure-1 dated 29.06.2020 for the tax period from 01.10.2015 to 30.06.2017. Even though the Assessing Authority has himself admitted that the order has been passed ex-parte and without affording opportunity of hearing to the petitioner and as such, the petitioner preferred First Appeal and thereafter Second Appeal, but neither of the forums has taken note of such fact. Rather, they have mechanically confirmed the order passed by the Assessing Authority under Annexure-1 dated 29.06.2020, which is absolutely non-application of mind. 8. In view of such position, this Court is of the considered view that the order dated 29.06.2020 passed Page 8 of 9 // 9 by the Assessing Authority under Annexure-1, as well as confirming orders passed by the First Appellate Authority, vide order dated 27.09.2021 under Annexure- 2, and the Second Appellate Authority, vide order dated 27.09.2023 under Annexure-3, cannot be sustained in the eye of law and the same are liable to be quashed and are hereby quashed. The matter is remitted back to the Assessing Authority for fresh assessment. The Assessing Authority is directed to make fresh assessment and pass appropriate order by affording opportunity of hearing to the petitioner in accordance with the provisions of law. 9. In the result, therefore, the revision is allowed. G. SATAPATHY, J. I agree. (DR. B.R. SARANGI) JUDGE (G. SATAPATHY) JUDGE Signature Not Verified Orissa High Court, Cuttack The 26th April, 2024, Ashok Digitally Signed Signed by: ASHOK KUMAR JAGADEB MOHAPATRA Designation: Secretary Reason: Authentication Location: HIGH COURT OF ORISSA Date: 29-Apr-2024 17:14:39 Page 9 of 9