1997 (11) TMI 498 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to order of Sales Tax Officer for non-compliance with appellate authority's directions in reassessment proceeding.

Detailed Analysis:

1. The petitioner, a registered dealer under Orissa Sales Tax Act and Central Sales Tax Act, was reassessed for the year 1989-90 due to allegations of suppression of purchase of betelnut by another firm. The petitioner disputed the allegations and requested confrontation with the other firm's owner, but the assessing authority only issued a notice by registered post and proceeded with the assessment without further steps.

2. On appeal, the Assistant Commissioner remanded the matter with directions to issue summons to the other firm's owner for confrontation with the petitioner. However, the summons sent via registered post was refused by the owner, and the assessing authority deemed this refusal as sufficient service, leading to the impugned assessment order dated February 28, 1997.

3. The High Court emphasized that sales tax authorities possess powers akin to a civil court, citing the applicability of Section 32 of the Code of Civil Procedure. The Court held that the mere issuance of a notice by registered post did not fulfill the assessing authority's obligation. Section 32 empowers the authority to compel attendance through various means, including arrest, attachment of property, imposition of fines, and commitment to civil prison in case of default.

4. Referring to a decision of the Allahabad High Court, the Court reiterated that when an assessee denies a sale, the onus shifts to the Revenue to disprove the contention. In this case, the onus was on the Revenue to establish the alleged suppression of transactions.

5. The Court concluded that the assessing authority, as a quasi-judicial body, failed to utilize the powers under Section 32 of the Code of Civil Procedure. It stressed the importance of the authority acting fearlessly and fairly in matters concerning revenue interests. Consequently, the reassessment order was quashed, directing the assessing authority to take coercive measures to ensure the other firm's representative's presence for reassessment.

6. In light of the above analysis, the writ petition was allowed, and the reassessment order was quashed. The assessing authority was instructed to ensure the presence of the other firm's representative for reassessment, following the legal principles established in the referenced case from the Allahabad High Court.

7. The judgment was delivered by the Chief Justice, with concurrence from Justice P.K. Tripathy, who agreed with the decision to allow the writ petition.