2004 (6) TMI 600 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to assessment order under Orissa Entry Tax Act, 1999 for the period 2000-2001 due to lack of reasonable opportunity to prove correctness and completeness of return.

Analysis:

1. The petitioner challenged the assessment order under the Orissa Entry Tax Act, 1999 for the period 2000-2001, claiming they were not given a reasonable opportunity to prove the correctness and completeness of the return as required by sub-section (4) of section 7 of the Act.

2. The court requested records to verify if the petitioner was given an opportunity before the assessment order was passed. The Additional Standing Counsel argued that the petitioner was aware of the assessment under both the Sales Tax Act and the Entry Tax Act, citing rule 15(1) of the Orissa Entry Tax Rules, 1999.

3. The petitioner's counsel contended that the assessing authority did not provide a reasonable opportunity as mandated by the proviso to sub-section (4) of section 7 of the Orissa Entry Tax Act, 1999. They argued that the notice issued to the petitioner was only for assessment under the Sales Tax Act and not the Entry Tax Act.

4. The court highlighted the proviso to sub-section (4) of section 7, emphasizing that the assessing authority must give a reasonable opportunity to the dealer to prove the correctness of the return. Since the authority did not accept the petitioner's return as correct and complete, they were obligated to provide such an opportunity.

5. Examining the notice issued to the petitioner, the court found that it only pertained to the Sales Tax Act and did not address the Entry Tax Act. Consequently, the petitioner was not given a chance to prove the correctness and completeness of the return under the Entry Tax Act, leading to the assessment being quashed on this ground.

6. The court addressed the argument based on rule 15(1) of the Orissa Entry Tax Rules, clarifying that it cannot override the proviso to sub-section (4) of section 7 of the Orissa Entry Tax Act, 1999. The dealer must be given a reasonable opportunity before a best judgment assessment can be made.

7. As a result, the court quashed the assessment under the Orissa Entry Tax Act for the period 2000-2001, ensuring that the assessment under the Sales Tax Act remained unaffected. The petitioner was granted a reasonable opportunity to prove the correctness of the return, and fresh assessment orders were to be passed accordingly.

8. The writ petition was allowed, and the court directed the supply of an urgent certified copy of the order upon proper application.