2019 (3) TMI 1965 - HC - VAT and Sales Tax

Validity of re-assessment order - suo motu revision proceeding - sales tax exemption on sale turnover - HELD THAT - The petitioner dealer is entitled to get any opportunity of hearing and to place its case. Accordingly, we have no hesitation to set aside the order dated 11.1.2005 passed by the Assistant Commissioner of Commercial Taxes, Sundargarh Range, Rourkela under Rule 80 of the Orissa Sales Tax Rule for the assessment year, 1997-98 and direct the assesseepetitioner to appear before the said authority on 2nd May, 2005 and file its show cause. On its appearance on the date fixed, the Assessing Officer shall fix up the date of hearing and dispose of the matter within a period of two months from the date of appearance of the petitioner. The Assessing Officer shall act on production of the certified copy of this order. In that view of the matter, the basis on which suo motu revision was initiated does not survive. Thus, the suo motu revision proceeding for re-assessment is required to be quashed and the same is quashed. Petition allowed.

Summary

Issues Involved:
1. Challenge to the order dated 25.06.2005 by the Assistant Commissioner of Sales Tax.
2. Exemption granted for Pioneer Industry.
3. Reassessment and tax exemption calculations.
4. Appeal and reassessment orders.
5. Suo motu revision proceeding under Rule 80 of the O.S.T. Rules.
6. Legal principles regarding tax exemption and reassessment.

Detailed Analysis:

1. Challenge to the Order Dated 25.06.2005:
The petitioner challenged the order dated 25.06.2005 passed by the Assistant Commissioner of Sales Tax, Sundargarh Range, Rourkela, which initiated a suo motu revision proceeding under Rule 80 of the O.S.T. Rules for reassessment for the year 1997-98.

2. Exemption Granted for Pioneer Industry:
The petitioner was originally granted an exemption for Pioneer Industry for the period from 03.01.1996 to 02.01.2003, as per the order dated 28.11.1997 by the Director of Industries, Orissa. The total exemption amount certified was ?3,94,56,303/-. The Sales Tax Officer, Rourkela-I Circle, considered this exemption while passing the assessment order for the year 1997-98.

3. Reassessment and Tax Exemption Calculations:
The Sales Tax Officer observed that the dealer availed tax exemption on the purchase of raw materials and Plant & Machinery against Form I-D (92) and sales tax exemption on sale turnover. The total tax exemption availed during the year under assessment was calculated to be ?88,89,259.00.

4. Appeal and Reassessment Orders:
In an appeal, the Assistant Commissioner of Sales Tax set aside the assessment orders for the years 1997-98 and 1998-99, directing reassessment with instructions to accept declaration in Form 'C' after scrutiny. The reassessment was conducted, and the Assessing Officer calculated the notional tax on valid declarations and sales turnovers, resulting in a total tax exemption availed of ?58,14,840.00.

5. Suo Motu Revision Proceeding Under Rule 80 of the O.S.T. Rules:
The petitioner approached the High Court against the suo motu revision proceeding initiated under Rule 80 of the O.S.T. Rules. The High Court observed that the petitioner was not given an opportunity of hearing, which was a violation of principles of natural justice. The Court set aside the order dated 11.1.2005 and directed the petitioner to appear before the authority for a fresh hearing.

6. Legal Principles Regarding Tax Exemption and Reassessment:
The revisional authority initiated a suo motu revision based on a Tribunal judgment, which was later reversed by the High Court in the case of Luis Packaging Pvt. Ltd. The Court held that when the State Government issues a notification for tax concession, it is assumed that the Government is aware of other concessions available under the Act. The benefits under IPR, 1996, were considered over and above what was provided under the OST Act. The Court emphasized that different treatments for exemptions and deferments should be avoided for a fair and harmonious interpretation of the statute.

Conclusion:
The High Court concluded that the basis for the suo motu revision proceeding did not survive as the Tribunal's decision was no longer good law. Consequently, the suo motu revision proceeding for reassessment was quashed, and the writ petition was allowed to the extent stated. The petitioner was granted urgent certified copies of the order upon proper application.