2023 (9) TMI 350 - HC - VAT and Sales Tax

Imposition of freight charges at the rate of one per cent. of the purchased value on overall turnover on the basis of the market value - Non-examination of individual vouchers - mala fide or intention of evading taxes or not - levy of penalty - HELD THAT - The court finds that this indeed is an audit assessment under section 9C of the OET Act and at the relevant point in time, the decision of this court in Chandrakanta Jayantilal 2022 (7) TMI 607 - ORISSA HIGH COURT was not available and, therefore, perhaps the issue was not raised by the assessee. That does not however mean that it cannot be raised a subsequent stage since it is a jurisdictional issue. Since the Tribunal also had no occasion to examine the issue, the court considers it appropriate to direct that the matter be restored to the file of the Tribunal for a fresh decision - impugned order set aside.

Summary

Issues:
1. Validity of imposition of freight charges on overall turnover without examining individual vouchers.
2. Justification of penalty imposition in absence of mala fide intent.
3. Validity of audit assessment under section 9C of the Orissa Entry Tax Act due to delay in submission of audit visit report.

Analysis:

Issue 1: Validity of Freight Charges Imposition
The revision petition challenges the imposition of freight charges at one percent of the purchased value on overall turnover without examining individual vouchers. The court framed the question of whether this imposition is sustainable in the eyes of the law. The petitioner contends that the purchased materials at market rate already include freight charges. The court directed the Tribunal to re-examine this issue after scrutinizing the vouchers provided by the petitioner.

Issue 2: Justification of Penalty Imposition
The second question raised pertains to the justification of penalty imposition in the absence of any mala fide intent to evade taxes. The petitioner argues against the penalty imposition without any intentional evasion. However, the court did not provide a direct resolution to this issue in the judgment.

Issue 3: Validity of Audit Assessment
The petitioner also raises the issue of the validity of audit assessment under section 9C of the Orissa Entry Tax Act due to a delay in submitting the audit visit report (AVR). The counsel refers to a previous court order that favored the assessee on a similar jurisdictional issue. The court acknowledged that this is a jurisdictional matter and directed the Tribunal to consider the validity of the audit assessment in light of the previous court decision.

In conclusion, the High Court set aside the Tribunal's order and restored the case for fresh consideration. The Tribunal was directed to re-examine the validity of the audit assessment due to the delay in submitting the AVR, along with the issue of freight charges, based on the individual vouchers. The court clarified that it did not express any view on the matter and requested the Tribunal to dispose of the appeal within six months of the listed date. The revision petition was disposed of accordingly, with an urgent certified copy of the order to be issued.