2015 (8) TMI 1560 - HC - VAT and Sales Tax

Levy of Entry tax - procurement of 66393.87 mts of boulder from the petitioners own leased quarry and the purchase of boulder by the petitioner of 250977.78 mts from one M/s. Start Trading Pvt. Ltd. - whether boulder was not a schedule goods under the Orissa Entry Tax Act, 1999? - HELD THAT - The second proceeding under Section 10 of the O.E.T. Act under Anenxure-3 to the writ application was merely based upon the audit conducted by the Auditor General which once again raised the issue as to whether boulder was a mineral or not. This turn- over and the period was covered by the earlier order dated 26.02.2011 passed under Section 10 of the O.E.T. Act under Anenxure-1 and consequently having attained finality and no challenge having been made to the same, remains final and binding on all parties. The opposite party had no jurisdiction in this matter to initiate a fresh proceeding under Section 10 of the O.E.T Act, resulting in passing of the order dated 31.07.2012 under Annexure-3 - there are no hesitation in directing quashing of Anenxure-3 - application disposed off.

Summary

Issues involved:
Challenge to order under Orissa Entry Tax Act, 1999 based on audit objection after a concluded reassessment; Interpretation of Section 10 of O.E.T. Act for re-exercise of power; Validity of initiating a fresh proceeding for the same issue, turnover, and period; Application of legal principles regarding audit objections and discretion of statutory authorities.

Analysis:
The petitioner challenged an order passed by the Sales Tax Officer under the Orissa Entry Tax Act, 1999, based on an audit objection, after a concluded reassessment for the same period. The petitioner contended that once an issue had been finalized through a reassessment under Section 10 of the O.E.T. Act, it cannot be reopened unless questioned or challenged. The petitioner relied on a judgment emphasizing that issuing a notice based on an audit objection requires the officer to form an independent opinion. The court referred to legal principles stating that a statutory authority cannot act under the direction of others as it would amount to surrendering discretion.

The Revenue argued that there might be circumstances allowing a re-exercise of power under Section 10 of the O.E.T. Act but not for the same issue, turnover, and period. Any other interpretation could lead to changing opinions expressed during statutory duties. The court observed that the second proceeding was solely based on an audit raising the same issue regarding the nature of boulders, already covered in the earlier final order. As no challenge was made to the initial order, it remained binding on all parties.

The court concluded that the Revenue had no jurisdiction to initiate a fresh proceeding under Section 10 of the O.E.T. Act for the same issue and period, leading to the quashing of the order based on the audit objection. The judgment highlighted the importance of finality in statutory orders and the need for independent decision-making by authorities. The writ application was disposed of with directions for further consideration of other issues in appropriate proceedings.

In a related miscellaneous case, the court disposed of it in view of the order passed in the main writ petition. The judgment underscores the significance of legal principles governing audit objections, discretion of statutory authorities, and the limitations on re-exercising powers under statutory provisions.