1990 (7) TMI 328 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 24(2)(b) of the Orissa Sales Tax Act, 1947.
2. Validity of assessment under section 12 of the Act.
3. Justification of retrospective withdrawal of compounding order by revenue authorities.
4. Requirement of opportunity for the dealer before approval for assessment under section 12.
5. Applicability of section 12(8) for assessment.

Analysis:
1. The case involved an application under section 24(2)(b) of the Orissa Sales Tax Act, 1947, by a registered dealer. The dealer, an individual, conducted a business selling atta (flour) under a trade name after purchasing wheat from the Food Corporation. The Sales Tax Officer issued a notice to pay tax based on the gross turnover exceeding a specified amount during the year. The assessment was completed under section 12(4) of the Act after the dealer failed to avoid it at various stages.

2. The assessment under section 12 was found to be valid as the gross turnover of the dealer exceeded the specified amount, giving jurisdiction to the Sales Tax Officer. The initiation of assessment under section 12 required prior approval of the Assistant Commissioner as per rule 90-A(4). The rule allowed assessment if certain conditions, including gross turnover exceeding a specified amount, were met. The withdrawal of the privilege of lump sum payment was not envisaged under the rule.

3. The issue of retrospective withdrawal of the compounding order was deemed of academic interest only. Rule 90-A(4)(i)(b) did not contemplate such withdrawal, and the conditions for assessing a dealer benefiting from lump sum payment were clear. Since the conditions were met, the retrospective withdrawal did not need examination in this case.

4. The question regarding the requirement of opportunity for the dealer before approval for assessment under section 12 was raised. It was clarified that the dealer would have the opportunity to explain turnover during the regular assessment proceeding. The rule did not mandate the Assistant Commissioner to provide an opportunity before approving the assessment. As long as the conditions for assessment were satisfied, the approval could not be challenged due to the absence of an opportunity.

5. The argument for assessment under section 12(8) was presented, suggesting it would have been more beneficial. However, it was noted that both section 12(4) and section 12(8) provided for best judgment assessment. The lack of explanation on how section 12(8) would be advantageous led the court to conclude that such a question did not require consideration. Ultimately, the court found no question of law arising from the order, and the Tribunal was justified in refusing to state a case, leading to the dismissal of the application.