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2015 Supreme(Ori) 41
HIGH COURT OF ORISSA, CUTTACK
I. MAHANTY AND B.N. MAHAPATRA, JJ.
Jai Balaji Jyoti Steels Ltd. - Petitioner
Versus
Deputy Commissioner of Sales Tax, Rourkela -II Circle, Panposh and others - Opp. parties
W.P. (C) NO.23473 OF 2013
Decided On : 10.02.2015
Advocate Appeared:
For Petitioner:Mr. J. Sahoo, Sr. Advocate Alok Mohapatra
For Opp. Parties : Mr. R.P. Kar, Standing Counsel
The Assessing Officer's insistence on the production of books of account before supplying certified copies of seized documents and reasons for reopening the assessment was justified, and the ex parte assessment order should not be set aside to avoid prejudice to the interest of the State.
Headnote:
OVAT Act - Challenge to Assessment Order - Sections 43, 39, 40, 42, 44 - The court discussed the legality of the assessment order passed under Section 43 of the Orissa Value Added Tax Act, 2004 and the petitioner's obligation to produce books of account before supplying certified copies of seized documents and reasons for reopening the assessment. The court also examined the principle of natural justice, acceptance of allegations in the report, and the appropriateness of setting aside the ex parte assessment order.
Fact of the Case:
The petitioner challenged the legality of the assessment order passed under Section 43 of the Orissa Value Added Tax Act, 2004, alleging it to be illegal, arbitrary, and without jurisdiction. The petitioner contended that the Assessing Officer insisted on the production of books of account before supplying certified copies of seized documents and reasons for reopening the assessment. The petitioner also argued that no reasonable opportunity of hearing was afforded, and the assessment order was passed ex parte.
Finding of the Court:
The court found that the Assessing Officer was justified in insisting on the production of books of account before supplying certified copies of seized documents and reasons for reopening the assessment. It held that reasonable opportunity of hearing was afforded to the petitioner, and the principle of natural justice was duly complied with before passing the ex parte assessment order.
Issues: The issues included the justification of the Assessing Officer's actions, compliance with the principle of natural justice, acceptance of allegations in the report, and the appropriateness of setting aside the ex parte assessment order.
Ratio Decidendi: The court held that the Assessing Officer was justified in his actions, reasonable opportunity of hearing was provided, and the ex parte assessment order should not be set aside as it would cause prejudice to the interest of the State. The plea for liberty to prefer appeal in case of failure was dismissed.
Final Decision: The writ petition was dismissed.
JUDGMENT :
B. N. MAHAPATRA, J.
The present writ petition has been filed challenging legality/validity of the order of assessment dated 17.07.2013 passed under Section 43 of the Orissa Value Added Tax Act, 2004 (for short, OVAT Act’) by opposite party No.1-Deputy Commissioner, Sales Tax, Rourkela Circle-1, Panposh for the tax period 01.04.2008 to 20.05.2011 on the ground that the said order of assessment is illegal, arbitrary, without jurisdiction and has been passed in gross violation of principles of natural justice. The further prayer of the petitioner is to direct the opposite party No.1 to release the seized documents/statements to the petitioner within a stipulated period of time.
2. Petitioner’s case in a nutshell is that the petitioner at the relevant time was a registered dealer under the provisions of the OVAT Act. For the tax period 01.04.2006 to 30.03.2011, the petitioner had been assessed under Section 42 of the OVAT Act vide assessment order dated 30.03.2011. The petitioner has not been assessed under the OVAT Act under Sections 39, 40, 42 and 44 for the period 01.04.2011 to 25.05.2011. Opposite Party No.2, STO, Investigation Unit, Rourkela Circle-2, Panposh visited the place of business of the petitioner-Company on 20.05.2011. On the date of inspection, without carrying on weighment of the physical stock, Investigating Officer alleged suppression of sale/purchase turnover. Opposite party No.2 without actual verification of the books of account and physical stock at the time of visit wanted production of accounts at his office for which notice in Form VAT 401 was issued to the petitioner fixing the date to 27.05.2011. In course of inspection, opposite party No.2 seized note books, files, documents vide seizure list dated 20.05.2011. Opposite party No.2 submitted the ex-parte report alleging suppression of purchase/sale turnover against the petitioner suggesting assessment of escaped turnover and tax for the aforesaid tax period. Thereafter, proceeding under Section 43 of the OVAT Act for the tax period 01.04.2008 to 20.05.2011 was initiated by issuing notice dated 28.03.2012 in Form VAT 307 fixing the date for production of regular books of account and documents to 10.05.2012. On the date fixed, i.e., 10.05.2012, the petitioner appeared through Advocate and filed an application for supply of copies of documents seized by opposite party No.2 on 20.05.2011. The petitioner has also applied to the Assessing Officer for grant of copy of the order sheet and copy of the statement of the Assistant General Manager (Commercial), Sri S. Ladia recorded during inspection and to supply the reasons of reopening the assessment. Opposite party No.1-Deputy Commissioner of Sales Tax, Rourkela-II Circle, Panposh without granting copies of the seized documents and statements merely adjourned the proceeding from time to time and ultimately on 17.07.2013 the impugned order of assessment was passed raising tax and penalty to the tune of Rs.28,43,57,055.00. Hence, the present writ petition.
3. Mr. J. Sahoo, learned Senior Advocate appearing for the petitioner vehemently argued that the Assessing Officer has committed grave error of law in insisting the petitioner to produce the regular books of account and documents, before granting copies of seized documents to the petitioner. The Assessing Officer has legal obligation to release the note books/documents, which were seized from the petitioner and proposed to be utilized in the assessment/reassessment proceeding to the detriment of the assessee. Placing reliance on the orders of this Court in the case of M/s Amar Jyoti Granite (India) Private Ltd. Vs. Sales Tax Officer passed vide order dated 18.01.2007 in W.P. (C) No.15658 of 2006 and M/s. Sarada Store vs. Sales Tax Officer [OJC No.9381 of 1995] disposed of on 11.01.1996, it was submitted that the opposite party No.1 should have granted release of seized documents after keeping authenticated copy of the same being signed by the assessee.
