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2007 (9) TMI 390 - SC - VAT and Sales TaxWhether the High Court was right in holding that the Sales Tax Officer (Vigilance) was not entitled to realise the amounts as he has been functioning under the Inspector-General of Police (Vigilance)? Whether the Sales Tax Officer (Vigilance) was entitled to assess and recover/realise the sum of Rs. 32,592 as tax from the assessee? Held that - Appeal allowed. In the present case, the Sales Tax Officer appointed to search and seize is from the Sales Tax Department and he is a Sales Tax Officer (Vigilance) who has been given the power under section 16D of the Act not only to search and seize the documents but also to recover the amount on the spot. Therefore, on the first point, the High Court had erred in stating that the Sales Tax Officer (Vigilance) was not entitled to assess and recover the tax as he functioned under the Inspector-General of Police. It is well-settled that the concepts of chargeability, assessment, quantification and recovery of tax are independent concepts under any taxing law. Section 12 of the Act refers to assessment whereas provisions after section 15 of the said Act refer to recovery and collection of tax. The scheme of the Act, therefore, is based on the dichotomy between assessment on one hand and recovery of tax on the other hand. Under section 12, the assessing officer has to examine the returns. He may accept the returns.
Issues Involved:
1. Competence of the Sales Tax Officer (Vigilance) to make assessments under section 16D of the Orissa Sales Tax Act, 1947. 2. Entitlement of the Sales Tax Officer (Vigilance) to assess and recover/realize tax from the assessee. Issue-wise Detailed Analysis: 1. Competence of the Sales Tax Officer (Vigilance) to Make Assessments: The respondent contended that the Sales Tax Officer (Vigilance) was not competent to make assessments under section 16D of the Orissa Sales Tax Act, 1947, as he was under the control of the Inspector-General of Police (Vigilance). The High Court held that the Sales Tax Officer (Vigilance) was not entitled to realize the amounts since he functioned under the Inspector-General of Police (Vigilance), thus quashing the order of the Additional Commissioner. The Supreme Court examined section 17 of the Act, which allows the Commissioner to delegate his powers and duties to any person appointed under section 3 to assist him. The Court also reviewed section 3(1) of the Act, which empowers the State Government to appoint any person as the Commissioner of Sales Tax, who shall exercise powers and discharge functions under the Act. The Court noted that the Commissioner had issued a notification on May 14, 1997, delegating his powers under section 16D of the Act to Sales Tax Officers and Inspectors of Sales Tax. The Court concluded that the Sales Tax Officer (Vigilance) was indeed from the Sales Tax Department and had been given the power under section 16D to search, seize documents, and recover amounts on the spot. Therefore, the High Court erred in stating that the Sales Tax Officer (Vigilance) was not entitled to assess and recover tax due to his functioning under the Inspector-General of Police. 2. Entitlement to Assess and Recover Tax: The second issue was whether the Sales Tax Officer (Vigilance) was entitled to assess and recover the sum of Rs. 32,592 as tax from the assessee. The Supreme Court analyzed the scheme of the Act, particularly the definitions and provisions related to the roles of the Commissioner and the Sales Tax Officers. The Court reviewed section 12, which deals with the assessment of tax by the Commissioner based on returns filed by the dealer. Section 16D, however, deals with the production and inspection of documents and accounts, allowing the Commissioner to enter premises, examine goods, and inspect records. The Court emphasized that section 16D is a self-contained code, operating in a different sphere from section 12. The Court clarified that the word "assess" in section 16D refers to computation, which is also a form of assessment. The Sales Tax Officer (Vigilance) is empowered to compute the tax on the spot for the release of seized goods/vehicles, which is distinct from the regular assessment under section 12. The Court found no merit in the respondent's argument that the Sales Tax Officer (Vigilance) could only search, seize, and refer the matter to the assessing officer. The computation of tax by the Sales Tax Officer (Vigilance) on the spot is considered an assessment for the purposes of section 16D. Conclusion: The Supreme Court set aside the High Court's judgment, allowing the civil appeal with no order as to costs. The respondent was entitled to adopt appropriate proceedings regarding the quantification of penalty and tax before the appropriate authority in accordance with the law.
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