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TMI Blog2022 (6) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... in the OST Rules have not been followed. In a similar situation, the enhanced assessment directed by the Tribunal was interfered with in the case of UTKAL SALES CORPORATION VERSUS STATE OF ORISSA [ 2008 (3) TMI 651 - ORISSA HIGH COURT ] and the matter was remanded for a fresh consideration in accordance with law. Non-issuance of notice in terms of Rule 57 of the OST Rules - HELD THAT:- In any case, the Petitioner could have filed a cross-appeal, had it been aggrieved by any part of the order of the ACST. Nevertheless, the Tribunal had an obligation to issue a notice to the Petitioner for submission of cross-appeal as is required under Rule 57 of the OST Rules. STO declined to accept the explanation offered by the Petitioner towards the shortage in stock to the extent of 1899.15 Quintals of paddy which was based on sampling method on the ground that on the date of inspection, the dealer was present and admitted that each bag of paddy weighed 75 Kg - mere stock deficiency by itself could not be sufficient unless it is specifically shown that the suppressed stock was, in fact, sold by the assessee. In the present case, there is no material brought on record from the side o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Mahabir Rice Mill v. State of Orissa reported in 1983 54 STC 218 (Ori)? (c) Whether the determination of sales turnover by the Tribunal can be held to be based on lawful and valid nexus and sustainable in law? (d) Whether, in the facts and circumstances of the case, disposal of second appeal by the Tribunal without compliance of Rule 57 of the Rules for service of notice inviting cross-objection is justified in view of Section 23(3)(b) of the OST Act read with Rule 52 of the Rules? 3. In fact, in the present case, fraud case reports alleging purchase and sales suppression of paddy, rice and broken rice by the Petitioner were received, whereafter, proceeding under Section 12(4) of the OST Act for the period 1997-98 was initiated. As a result, the Sales Tax Officer, Sambalpur-I Circle, Sambalpur (in short the STO ) recomputed the tax and directed the Petitioner to pay the balance amount of Rs.3,41,352/-. The said demand was challenged by the Petitioner before the Assistant Commissioner of Sales Tax, Sambalpur Range, Sambalpur (in short the ACST ) which was partly allowed and the assessment was reduced by Rs.2,51,748/- with a direction to refund the excess paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciated by the Tribunal as it has also not considered the specific objection regarding the weight of each bag taken at 75 Kg as the paddy kept in the bags ranged from 62- 75 Kg, as earlier the Vigilance Wing had taken the stock @ 64 Kg per bag but it has been erroneously pegged at 75 Kg each bag at the time of inspection and subsequently stood accepted by the authority concerned. Mr. Sahoo contends that the allegation of excess stock giving rise to the claim of purchase suppression is not valid and lawful for which the impugned enhancement of turnover by the Tribunal is manifestly illegal and arbitrary. It is submitted that the enhancement was directed by the Tribunal without due notice which is required as per Rule 50(3) of the Rules, and while claiming so, an order dated 12th March, 2008 of this Court in STREV No.245 of 2007 decided in M/s Utkal Sales Corporation v. State of Orissa and disposed on 12th March, 2008 is placed reliance. It is further contended that the appeal by the Tribunal was disposed of without complying Rule 57 of the Rules, whereby, notice is issued for filing of cross-objection. As regards, the sampling method which was adopted by the inspecting offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner towards the shortage in stock to the extent of 1899.15 Quintals of paddy which was based on sampling method on the ground that on the date of inspection, the dealer was present and admitted that each bag of paddy weighed 75 Kg. However, the ACST held that the shortage in stock of paddy, rice, broken rice is bound to occur in course of storage and handling and that apart, the inspection unit counted it on eye estimation by taking each bag of paddy at uniform rate of 75 Kg without weighment being done physically and while doing so, it should have been confronted to the Appellant with the observation that the Vigilance Wing previously had taken the stock sample @ 64 Kg per bag and hence, rejected the allegation of sales suppression. The above conclusion was overruled by the Tribunal but then, it allowed the enhancement by Rs.2,46,937/- and the assessment order of the STO was thereby reduced by Rs.4,811/-. Apart from the above contentions raised by Mr. Sahoo, another ground is taken which is to the effect that even if the unexplained shortage of stock is shown, the enhancement of taxable turnover cannot be sustained unless it is further proved that the stocks were sold by the asse ..... 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