2009 (10) TMI 862 - HC - VAT and Sales Tax

Whether, on the facts and in the circumstances of the case, learned Sales Tax Tribunal is justified to conclude that the assessee has no dealing on pure silk sarees merely because such pure silk sarees costs ₹ 250 per piece during that period and thereby annulling the assessment made for the year 1986-87 under section 12(8) of the Orissa Sales Tax Act, 1947 which is contrary to the facts admitted by the assessee? Held that - The reference made by the Tribunal and for that matter the contentions raised by the learned counsel for the Revenue in the revision are pure question of facts and they are not mixed questions of fact and law. The reference is discharged and for that matter the revision is dismissed.

Summary

Issues Involved:
1. Justification of the Sales Tax Tribunal's conclusion regarding the assessee's dealings in pure silk sarees.
2. Validity of the assessment made under section 12(8) of the Orissa Sales Tax Act, 1947.
3. Evaluation of the evidence and materials considered by the assessing officer and the Tribunal.
4. Determination of whether the Tribunal's decision involved a question of law or fact.

Issue-wise Detailed Analysis:

1. Justification of the Sales Tax Tribunal's Conclusion:
The Tribunal concluded that the assessee was not dealing in pure silk sarees during the assessment period of 1986-87. This conclusion was based on several factors:
- The disputed sarees were sold at Rs. 250 per piece, a price at which pure silk sarees were not available in the market during the relevant period.
- Physical verification by the Tribunal revealed that the disputed sarees were inferior in quality compared to pure silk sarees.
- The Tribunal compared a pure silk saree with one of the disputed sarees and found significant quality differences, supporting the conclusion that the sarees were not pure silk.

2. Validity of the Assessment Made Under Section 12(8) of the Orissa Sales Tax Act, 1947:
The assessing officer's decision to hold the assessee guilty of suppression was based on:
- The assessee's admission to the Inspecting Officer that he dealt in pure silk sarees.
- The detection of 39 pieces of pure silk sarees during the inspection.
- Sale memos indicating prices varying between Rs. 235 to Rs. 860.
However, the Tribunal found these bases insufficient, noting that the sale memos did not conclusively link higher-priced sarees to the disputed sarees labeled as "pure silk."

3. Evaluation of Evidence and Materials Considered:
The Tribunal's decision was challenged on the grounds that it disregarded the assessee's admission and the physical detection of 39 pure silk sarees. The Tribunal, however, considered additional evidence, including:
- Market price information indicating that pure silk sarees were not available at Rs. 250 per piece.
- Physical comparison of the sarees, which showed the disputed sarees were of inferior quality.
The Tribunal's approach was deemed appropriate as it sought to reach a just decision by examining the sarees in the presence of the State Representative without objection.

4. Determination of Whether the Tribunal's Decision Involved a Question of Law or Fact:
The Supreme Court's precedent in Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax, Madras was referenced to determine when a Tribunal's decision can be reviewed. It was concluded that:
- The Tribunal's findings were based on facts and inferences drawn from those facts, making it a question of fact rather than law.
- The Tribunal's decision did not lack evidence and was not perverse.
- The Tribunal acted within its jurisdiction and did not err in comparing the sarees to reach its conclusion.

Conclusion:
The High Court held that the issues raised were purely questions of fact and not mixed questions of fact and law. Consequently, the reference was discharged, and the revision was dismissed.