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2013 (7) TMI 863 - ORISSA HIGH COURTReopening of assessment - Orissa Value Added Tax Act, 2004 - Whether the assessing officer has passed the impugned assessment order on the dictate of his higher authority i.e. on the basis of the direction of the Special Commissioner as well as the report of the Dean of NIT prescribing the SION method? - whether violation of principles of natural justice? - Held that:- Undisputedly the audit assessment for the period 2006-07 was completed on the basis of books of account maintained by the petitioner relating to purchase of raw material, sales of finished products etc. But in the said assessment order the adverse material utilized against the petitioner in the impugned assessment order had not been utilized. Thus as in earlier assessment order, the adverse material utilized against the petitioner in impugned assessment order had not been utilized. Hence, the question of change of opinion of Assessing Officer does not arise in the facts and circumstances of the case. Law is well settled that the AO has to apply his own mind for making the assessment on the basis of the books of account maintained and any material in his possession after confronting the same to the assessee. He should not mechanically complete the assessment and abdicate and surrender to the report of any higher authority. Perusal of the impugned order clearly reveals that the Assessing Officer after applying his mind and being satisfied that the alleged turnover had escaped from assessment, initiated the reassessment proceeding. See Indure Limited v. Commissioner of Sales tax, Orissa & others (2006 (7) TMI 572 - ORISSA HIGH COURT)and State of U.P. v. Maharaja Dharmandar Prasad Singh (1989 (1) TMI 315 - SUPREME COURT). Also though the AO utilized the adverse materials on the basis of which fraud case report Nos.20/29.04.2009 and report No.51/30.10.2010 were submitted he has not supplied the copy of the said adverse materials to the petitioner before passing the impugned order. Before utilizing the aforesaid two allegations against the petitioner, principle of natural justice demands that the 3rd party must be summoned and confronted with the petitioner and in case the petitioner demands for cross-examination of third party, he must be allowed to do so. Thus in the present case since the applicant had not availed the chance of explaining its position on account of refusal by the authorities to summon certain officials of the Port Trust for which it had filed applications, the principle of natural justice had been violated. From the tax evasion report No.51/30.10.2010, it is further noticed that the Vigilance Officials in course of inspection conducted on 04.05.2010 found a slip from the premises of the petitioner-company wherein ₹ 15,000/- had been written.In the instant case, the Vigilance Officer discovered the said slip from the business premises of the petitioner-dealer and the Assessing Officer drew certain inferences from the noting made on the slip, but failed to establish such inferences. Thus Law is well settled that no demand can be raised in an assessment on suspicion and conjecture. Therefore, before utilizing the said slip against the petitioner, the AO has to prove that through the said noting in the slip, the petitioner has sold materials worth of ₹ 12,15,922/- which was not disclosed in the books of account. In the instant case, the same has not been done. Thus allow the writ petition, set aside the impugned assessment order as well as the demand raised under Annexure-9 and remand the matter to the Assessing Officer to re-do the assessment.
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