The provisions requiring pre-deposit for entertaining an appeal and authorizing imposition of penalty were constitutionally valid.

JUDGMENT :

B.N. Mahapatra, J. - This writ petition has been filed with the following prayers :

(i) Admit and allow the present writ petition,

(ii) Strike down section 77(4) of the Orissa Value Added Tax Act, 2004 read with the proviso to rule 87 of the Orissa Value Added Tax Rules, 2005 as ultra vires the Constitution of India and declare it as unconstitutional and violative of articles 14, 19, 21 and 265 of the Constitution of India.

(iii) Strike down section 42(5) of the Orissa Value Added Tax Act, 2004 read with rule 49(6) of the Orissa Value Added Tax Rules, 2005 as ultra vires the Constitution of India and declare it as unconstitutional and violative of articles 14, 19, 21 and 265 of the Constitution of India.

(iv) Quash the impugned audit assessment order dated October 20, 2008 for the assessment year 2005-06 and consequent demand notice(s) under the Orissa Value Added Tax Act, 2004.

(v) Quash the impugned communication notice No. 2177 dated May 16, 2008 under the OVAT in form VAT 306 issued by the assessing authority and the enclosed audit visit report dated March 31, 2008.

The petitioner's case in a nutshell is that it is a company incorporated and registered under the Companies Act, 1956, having its registered office at O. P. Jindal Marg, Hisar-125 005 (Haryana) and its unit within the State of Orissa at Kalinganagar Industrial Complex, Duburi, P. O. Danagadi, Dist : Jajpur, Odisha State. The petitioner is engaged in setting up of an integrated stainless steel plant as well as manufacture of ferro alloys. It is a registered dealer under the Odisha Value Added Tax Act, 2004 (for short, "the OVAT Act"). It is paying substantial amount of tax and is listed as a Large Tax Unit (LTU).

2. The officers of the Investigation Wing of the Commercial Taxes Department visited the business premises of the petitioner on October 1, 2007 without disclosing their identity and authorization. On objection and protest, the petitioner was threatened with various coercive actions. The petitioner therefore, under duress, protest and compulsion, rendered necessary assistance to the said persons and provided all informations and documents sought for from it. Documents and files were seized and removed from the petitioner' premises. No seizure list of documents and files seized and removed from the petitioner's premises was prepared and a copy thereof was handed over to the petitioner. Audit was completed on the same day. On or about first week of January, 2008, the petitioner received a notice in VAT 306 enclosing copy of audit visit report indicating the date of appearance before the Assistant Commissioner of Sales Tax, Jajpur Range, Jajpur Road on June 10, 2008. Pursuant to the above notice, the petitioner appeared and provided details required under the notice. The details were provided on various dates and last most important dates being October 24, 2008 and November 15, 2008. On or about November 19/20, 2008, the petitioner received the assessment order dated October 20, 2008 (annexure 2). Being aggrieved by the said assessment order, the petitioner has filed the present writ petition.

3. Mr. B. K. Mahanti, learned senior advocate appearing on behalf of the petitioner, challenging the vires of section 77(4) of the OVAT Act read with the proviso to rule 87 of the Orissa Value Added Tax Rules, 2005 (for short, "the OVAT Rules") submitted that the condition precedent of pre-deposit of 20 per cent of the tax or interest or both, in dispute, is ab initio void for entertaining an appeal (which effectively is the first available opportunity to approach the adjudicating authority) under the Scheme of the OVAT Act is unreasonable, oppressive and violative of and ultra vires article 14 of the Constitution of India. Lack of any provision in the statute and lack of any power in the hands of the statutory authority for relieving the assessee of the burdensome and onerous provision of pre-deposit (especially when the tax amount in full is deposited at the tim