2023 (1) TMI 540 - HC - VAT and Sales Tax

Suo motu revision of assessment orders passed by the Sales Tax Officer and Assistant Sales Tax Officer - delegation of authority to the Assistant Commissioner of Sales Tax - HELD THAT - The suppression of purchases has been established by due examination of the material on record and consideration of evidence produced by the petitioner during the course of proceedings. The Revenue Authorities were justified, therefore, in varying with the percentage of profit as stated to have been added by the petitioner for many years due to special circumstance that is obtained during the Assessment Years in question. This Court is not, therefore, inclined to interfere with the impugned Orders which have been passed on facts. Each assessment year is a separate and self-contained unit of assessment and the accounts of each year must be judged with reference to material pertaining to that assessment year. Merely because the accounts of the preceding year were rejected was no ground for rejecting the accounts for the assessment year in question. A resort to best judgment assessment can only be made if the account books produced were incomplete or otherwise unreliable and there is material to show that the assessee has suppressed such sales. In the instant case, certain material was seized on search being conducted by the Vigilance and such seized material was found to be relatable to the years in question. Said material was used during the course of assessment with confrontation. The fact-situation in the impugned Assessment Years being not identical to the earlier years, the contention of the petitioner that the percentage of profit as added to the purchase turnover to arrive at taxable turnover is liable to be repelled. Admittedly, in the present case, no additional material was adduced by the petitioner to show that the finding of the Assistant Commissioner of Sales Tax in suo motu proceedings as affirmed by the Commissioner of Sales Tax, Odisha in Appeals was perverse. This Court finds that sales tax revision itself is not entertainable against orders passed by the Commissioner of Sales Tax in exercise of power under Section 23(4)(c)(ii) of the OST Act - no ground has been made out by the petitioner-assessee in the instant revision petitions to invoke jurisdiction under Section 24 of the OST Act. The sales tax revisions are dismissed.

Issues Involved:
1. Maintainability of Sales Tax Revision petitions.
2. Competency of the Assistant Commissioner of Sales Tax to exercise suo motu revision power.
3. Legitimacy of the assessment orders and the appellate orders.
4. Validity of the Appellate Authority's confirmation of the suo motu revision orders.
5. Whether the factual findings of the Revenue Authorities were justified.

Issue-wise Detailed Analysis:

1. Maintainability of Sales Tax Revision petitions:
The petitioner initially challenged the orders dated 08.05.2006 under Article 226/227 of the Constitution of India, which were later converted to Sales Tax Revision petitions (STREV) upon request. The Court questioned the maintainability of STREV petitions against the Appellate Orders passed by the Commissioner of Sales Tax under Section 23(4)(c)(ii) of the Odisha Sales Tax Act (OST Act). It was clarified that the Assistant Commissioner of Sales Tax was competent to exercise suo motu revision power, making the Commissioner's orders appellate in nature. Therefore, the revision petitions were deemed improper and misleading, as revisions under Section 24 of the OST Act are maintainable only against Second Appeal Orders under Section 23(3).

2. Competency of the Assistant Commissioner of Sales Tax to exercise suo motu revision power:
The Assistant Commissioner of Sales Tax was authorized to exercise suo motu revision power under Section 23(4)(a) read with Rule 80 of the OST Rules, as per Notification No.14171-I-ST-76/63-CT, dated 03.08.1963. The assessment orders for the years 2001-02 and 2002-03 were framed by the Sales Tax Officer, making the Assistant Commissioner the competent authority for suo motu revision.

3. Legitimacy of the assessment orders and the appellate orders:
The Assessing Authority initially observed that the petitioner did not maintain a true account of sales and stock, leading to assessments based on a best judgment approach. The reassessment proceedings initiated under Section 12(8) of the OST Act were dropped erroneously, prompting the Assistant Commissioner to initiate suo motu revision. The Assistant Commissioner found that credit sales were not properly accounted for, leading to revised tax liabilities. The appellate orders confirmed the findings of the Assistant Commissioner, dismissing the appeals.

4. Validity of the Appellate Authority's confirmation of the suo motu revision orders:
The Appellate Authority upheld the suo motu revision orders, noting that the petitioner maintained only a purchase account and failed to account for credit sales adequately. The suppression of purchases was established through the examination of seized materials during a Vigilance inspection. The appellate orders emphasized that the petitioner's disclosed turnover was significantly low, justifying the suo motu revision proceedings.

5. Whether the factual findings of the Revenue Authorities were justified:
The Court noted that the findings of fact by the statutory authorities should be given due weight unless found to be based on no evidence or incorrect principles. The seized materials were relevant to the assessment years in question, and the Revenue Authorities were justified in their findings. The Court found no additional material from the petitioner to challenge the findings, concluding that the revision petitions were not maintainable and the question of law posed was actually a factual issue.

Conclusion:
The Court dismissed the revision petitions, stating that no grounds were made out to invoke jurisdiction under Section 24 of the OST Act. The orders passed by the Commissioner of Sales Tax in exercise of power under Section 23(4)(c)(ii) were upheld, confirming the suo motu revision orders based on evidence and material available on record. The sales tax revisions were dismissed with no order as to costs.

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