Orissa HC Directs Approaching AO for Tax Dues Dispute

MMTC Ltd. Vs Deputy Commissioner of Sales Tax and others (Orissa High Court)

Introduction: In a recent case, MMTC Ltd. Vs Deputy Commissioner of Sales Tax and others, the Orissa High Court held that disputes concerning the payment of tax dues are not suitable for resolution in a writ court. Instead, the court directed the petitioner to take their grievance to the Assessing Officer.

Analysis: The writ petition was filed to challenge the assessment order and demand notice issued by the Revenue authority. After the court vacated an earlier interim order, the petitioner deposited the full demanded amount but contended that it was not liable for the entire sum. The Revenue’s counsel argued that the case was not suitable for a writ petition as it involved disputed questions of fact and suggested that the petitioner approach the Assessing Officer for reconsideration.

The court recognized that the petitioner had certain disputes concerning the payment of dues, specifically the calculation of tax liability and the imposition of a penalty. Given these disputed facts, the court ruled that it was not the appropriate forum to resolve the case and directed the petitioner to present their grievances to the Assessing Officer.

Conclusion: This judgment underscores the importance of utilizing the correct legal channels for disputes. The Orissa High Court clarified that it cannot resolve issues involving disputed facts related to tax payments. Instead, such disputes should be handled by the Assessing Officer, the appropriate authority under the law. The case provides valuable insight into the demarcation of jurisdictional boundaries between different legal forums.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

2. Heard Mr. S. Ray, learned Senior Counsel appearing along with Mr. K.K. Sahoo, learned counsel for the petitioner and Mr. Sunil Mishra, learned counsel for the Revenue.

3. S. Ray, learned Senior Counsel appearing along with Mr. K.K. Sahoo, learned counsel for the petitioner files in Court today a rejoinder affidavit, which is taken on record.

4. The petitioner has filed this writ petition seeking to quash the assessment order and demand notice issued by the opposite party no.1 under Annexure-1 and Annexure-1A respectively.

5. In the opinion of this Court, the matter requires consideration.

6. S. Ray, learned Senior Counsel appearing along with Mr. K.K. Sahoo, learned counsel for the petitioner contended that while entertaining the writ petition this Court passed interim order on 30.11.2015 in Misc. Case No. 1845 of 2013, but subsequently vide order dated 16.08.2019, the said interim order was vacated. As a consequence thereof, the petitioner has already deposited the entire amount pursuant to the demand raised by the authority under Annexure-1 and Annexure-1A. It is contended that though the petitioner has deposited the amount as demanded by the authority, but the petitioner is not liable to pay that much of amount. Therefore, the petitioner wants to pursue the matter.

7. Sunil Mishra, learned counsel for the Revenue contended that appeal lies against the assessment order, but instead of preferring appeal the petitioner has approached this Court by filing the present writ petition, which is not maintainable. More so, after the interim order was vacated by this Court, the petitioner has already deposited the entire amount, as demanded by the authority. Therefore, if the petitioner has any grievance so far as error in calculation is concerned, then it has to approach the Assessing Officer for reconsideration of the same, instead of pursuing the writ petition, which involves disputed questions of fact.

8. Having heard learned counsel for the parties and after going through the records, this Court finds that admittedly while entertaining the writ petition, this Court passed interim order granting stay of the assessment order passed by the authority. Though such assessment order is appealable, but the petitioner has not relegated to that forum. Subsequently, the interim order passed by this Court has been vacated and the petitioner has already deposited the entire amount, as demanded by the authority under Annexure-1 and Annexure-1A. But now question arises that the petitioner disputes certain facts with regard to payment of dues and in paragraphs-3 and 4 of the rejoinder affidavit, it has been stated as under:-

“3. The Opp. Party also in page 31 has admitted-

“In narrating the above facts, the Sales Tax Officer, Enforcement Range, Bhubaneswar has made out a case for levy of OVAT @4% on the value of DEPBs received by the dealer corporation from the office of the Joint Director General of Foreign Trade, Odisha, Cuttack and dispatched to the Branch at Kolkata otherwise than by way of sale for its sale in the State of West Bengal. As per the case report of the Enforcement Wing, the dealer corporation is liable to pay VAT @4% U/s 12 of the OVAT Act amounting to Rs.56,31,639.24 on value of DEPBs dispatched to outside the State of Odisha on Stock Transfer basis amounting to Rs.14,07,90,981/- as per the following breakup:

4. And also in Page 43 and 44 of the brief the same has been admitted. But while calculating the tax liability @4% on 14,07,90,981.00 which comes to Rs.56,31,639.24, he has levied Rs.1,69,47,693.44 which is totally incorrect and the imposition of penalty amounting to Rs.3,38,95,386.88 is also illegal.”

9. In the above view of the matter, since there are disputed questions of fact, this Court cannot resolve the dispute involved in this writ petition. Therefore, this Court permits the petitioner to approach the Assessing Officer ventilating its grievance, which shall be considered in accordance with law.

10. With the above observation, the writ petition stands disposed of.