Om Shri Ashirbad Vs State of Odisha (Orissa High Court)
Orissa High Court held that the date when the material was discovered is not relevant. What is relevant is the nature of evidence or material discovered during the inspection. It cannot be utilized for making assessment for other years unless their relevance to any other period is established.
Facts- The petitioner is a proprietorship concern. As an unregistered dealer under the Odisha Sales Tax Act, 1947, it started its business from April 2004 in retail and semi-wholesale trade at Big Bazar, Berhampur and dealt in general merchandise, i.e., plastic goods, salt, rubber band, disposable glasses and plates etc.
The petitioner filed this revision u/s. 24 of the OST Act, 1947 to answer the question formulated in its favour and, consequentially, reverse/set aside/ annul the second appellate order by declaring that it is not liable to pay tax and penalty, as assessed and demanded by the revenue.
Notably, the Vigilance Wing of the Sales Tax Department with police personnel visited the business premises of the petitioner and conducted meticulous checks of stocks lying in the shop and took inventory of the same.
Now, the prime question is whether there can be a backward and forward projection of materials detected which are relevant to a particular assessment for the purpose of making assessment for some other year.
Conclusion- If the assessing officer wants to do so, some material has to be brought on record to justify just projection, which is absent in the present case. Thereby, the orders passed by the authorities cannot be sustained in the eye of law.
The vigilance officials inspected the premises and discovered that there was electronic weighing machine and the petitioner was found to have obtained Weights and Measures License. But that ipso facto cannot be construed to be materials available to make assessment. Therefore, the date when the material was discovered is not relevant. What is relevant is the nature of evidence or material discovered during inspection is the most important thing. In absence of the same, the same cannot be utilized for making assessment for other years unless their relevance to any other period is established by the Assessing Officer.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
The petitioner is a proprietorship concern of Sri A. Baikuntha Rao Subudhi. As an unregistered dealer under the Odisha Sales Tax Act, 1947 (for short referred to as “OST Act”), it started its business from April, 2004 in retail and semi-wholesale trade at Big Bazar, Berhampur and dealt in general merchandise, i.e., plastic goods, salt, rubber band, disposable glasses and plates etc. within the jurisdiction of the Sales Tax Officer, Ganjam Range, Berhampur. The petitioner has filed this revision under Section 24 of the OST Act, 1947 to answer the questions of law formulated at paragraph 32 of the revision petition in its favour and, consequentially, reverse/set aside/annul the second appellate order dated 31.12.2013 (Annexure-13) by declaring that it is not liable to pay tax and penalty, as assessed and demanded by the revenue.
2. The factual matrix leading to filing of the revision petition, as reveals from the record, is that previously the petitioner was a registered dealer under the OST Act, 1947 bearing Registration No.GAI-6142 dated 04.05.1988, but the same was cancelled under Section 9(3-f) with effect from 01.04.1997. Consequentially, the petitioner closed its business since the date of cancellation of registration certificate and had no business up to March, 2004. The reasons for non-carrying on the business are that its proprietor met with an accident and faced serious health hazards, for which, due to paucity of funds and financial constraints, it could not start its business. Thereafter, the petitioner purchased one electronic weighing machine and obtained Weights and Measures License on 10.07.2000 and also obtained license under the Odisha Shops and Commercial Establishments Act, 1956 on 17.07.2002. Said licenses were renewed each year but could not revive its business. Thereafter, the petitioner restarted its business from April, 2004. On 11.08.2004, the Vigilance Wing of the Sales Tax Department with police personnel visited the business premises of the petitioner and conducted meticulous check of stocks lying in the shop and took inventory of the same. The maximum sale price of the said goods was valued by the vigilance officials to be Rs.82,455/-. The vigilance also cross-checked cash found in the counter with that of the sales proceeds which was Rs.180/-. The inspecting officials enquired from the proprietor of the petitioner regarding the future plans and growth of business and the expected turnover which he thinks and hopes to achieve. In his answer, the proprietor of the petitioner explained that he expects and hopes to increase of its turnover up to around Rs.5 to Rs.7 lakhs annually, if the projected daily sales in future touches at an estimated average sale value of Rs.2,000/- per day, for which he is trying his level best in obtaining dealership of M/s. Savana Traders and Service, Cochin and others. The inspecting officials recorded the statement unilaterally of their own and made the proprietor of the petitioner to sign the same.
2.1. The Sales Tax Officer, Ganjam Circle, Berhampur, relying upon the Vigilance Report bearing No.8 dated 29.11.2004, which was forwarded to him, passed an ex parte order of assessment on 31.03.2006 under Section 12(5) of the OST Act, 1947 for the year 2000-01, issued in Memo No.11023 dated 05.09.2007, determining the G.T.O. & T.T.O. at Rs.6,20,000/- and raised demand of Rs.1,70,500/-.
2.2. Aggrieved by the said ex parte order of assessment dated 31.03.2006, the petitioner preferred appeal and the first appellate authority by its order dated 26.05.2009 in appeal bearing No.AA 207/2007-08 allowed the appeal of the petitioner by annulling the order of assessment. As such, the first appeal order passed by the Assistant Commissioner of Sales Tax, Ganjam Range, Berhampur was received by the petitioner on 22.07.2009. Thereby, it has reached its finality as not disputed by either of the parties.
2.3. After disposal of the first appeal for the year 2000-01, the assessing officer ignoring the findings of the said first appellate authority, again passed ex parte orders of assessment under Section 12(5) of the OST Act, 1947 for the years 2001-02 to 2004-05 on different dates by raising demands without serving any notice of assessment, as well as without extending due opportunity of hearing to the petitioner. The years and dates of the orders of assessment are extracted hereunder:
