2022 (7) TMI 570 - HC - VAT and Sales Tax

Principles of natural justice - percentage of yield of rice bran oil not decided from the evidence available on record - no scope for further enquiry - requirement to remand the case to the assessing authority especially when there is no suppression of sale on the part of the dealer-assessee - HELD THAT - In the present case, the Court finds that the Tribunal noted two things that there was no logic or materials to support the decision of the ACST to fix the yield percentage of price bran oil for the Petitioner at 20% for both the periods i.e. 2005-06 and the current year. Equally the Tribunal also found that the Petitioner s claim that the yield was 16.10% and 14.44% for the two periods respectively was also not supported by any logic or scientific materials. Although, counsel for the Petitioner contends that the Petitioner did place on record all the materials in his possession, it is evident that the Department was had not placed any materials on record in support of its contention. In the circumstances, requiring the ACST to undertake the exercise afresh after permitting the materials in support of either case to come on record appears to be the correct course of action for the Tribunal to have adopted - the Court is unable to find any error having been committed by the Tribunal in that regard. The impugned order of the Tribunal is not interfered with. It is clarified that Assessing Officer i.e. ACST will approach the entire issue of afresh uninfluenced by the earlier decision taken by the ACST or observations on merits by the Tribunal. The fresh exercise be completed by the ACST within period of four months from today - the question framed is answered in favour of the Department and against the Assessee - revision petition is disposed off.

Summary

Issues:
Challenge to order of Orissa Sales Tax Tribunal on assessment of rice bran oil yield percentage.

Analysis:
The Assessee, an SSI unit, was assessed under the OVAT Act, 2004, for allegedly claiming input tax credit illegally. The assessment was reopened based on an audit visit report alleging discrepancies in the yield of rice bran oil and stocks. The ACST determined the yield percentage at 20% based on comparisons with other units, leading to an additional tax demand.

The Assessee's appeal to the DCST was dismissed, prompting a further appeal to the Tribunal. The Tribunal found the ACST's decision lacked logic and scientific basis, remanding the matter to reassess the yield percentage based on the age of the oil extraction machine and rice bran quality. The Tribunal directed completion of the assessment within three months.

Upon framing a question of law, the High Court considered the arguments presented by both parties. The Petitioner contended that the Tribunal's remand was unnecessary as all materials were already on record. However, the Court noted the absence of supporting materials from the Department, necessitating a fresh assessment to determine crucial facts regarding the yield percentage and rice bran oil quality.

Ultimately, the Court ruled in favor of the Department, upholding the Tribunal's decision to remand the case for a fresh assessment by the ACST. The ACST was directed to approach the issue without influence from prior decisions and complete the reassessment within four months.

In conclusion, the revision petition challenging the Tribunal's order was disposed of, affirming the need for a fresh assessment to determine the yield percentage of rice bran oil accurately. The Court emphasized the importance of factual examination and directed the ACST to conduct the reassessment diligently within the specified timeframe.