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2022 (4) TMI 5 - HC - VAT and Sales TaxScope to examine the assessment record particularly when the question of jurisdiction as regards initiation of proceeding under Section 12(8) of the Orissa Sales Tax Act, 1947, has been raised by the Petitioner - Inclusion of transport charges, which is separately charged by the Petitioner, while determining sale price of the ballasts - non-consideration of certificate issued by the Railway authorities which has got probative value and was available on record - Orissa Sales Tax Tribunal committed error of law and fact in substituting its reasons with that of the ACST and/or the STO when the order of the ACST is supported by cogent reasons set out founded on materials available on record or not - application of independent quasi judicial mind - reversal of finding recorded by the first appellate authority supported by cogent reason and based on evidence available on respective records. Whether on the facts and in the circumstances of the case, the Tribunal is justified in holding that it has little scope to examine the assessment record particularly when the question of jurisdiction as regards initiation of proceeding under Section 12(8) of the Orissa Sales Tax Act, 1947, has been raised by the Petitioner? - HELD THAT:- The Court finds that the reopening of the assessment was based on the reports of the Circle IST and the AG Audit. Both objected to taxing of the works contract @ 4% whereas the contract involved supply of ballast. According to both reports, the said supply had to be treated as sale of ballast. Therefore, without entering at this stage into the question whether such opinion formed by the Circle IST and the AG Audit was right, the Court finds that the reopening of the assessment by the STO was not on a mere change of opinion but on the basis of the above materials made available to the STO - the Court is of the view that reopening the assessment cannot be said to be without jurisdiction - question is therefore answered in favour of the Department and against the Assessee. Whether on the facts and in the circumstances of the case, the Tribunal is correct in including transport charges, which is separately charged by the Petitioner, while determining sale price of the ballasts? - Whether on the facts and in the circumstances of the case, the Tribunal is correct in not considering the certificate issued by the Railway authorities which has got probative value and was available on record? - HELD THAT:- The finding of the First Appellate Authority that the works contract was one composite contract with the costs of supply of ballast and transportation not being shown separately and therefore, not amenable to be separately treated, has attained finality as far as the Assessee is concerned - Even otherwise, the Court finds that if the payment was a composite one which included the elements of supply of ballast and the cost of transportation till the site of stacking then, the Assessee cannot possibly seek to avoid including the transportation cost by relying on Section 5 (2) (A) (iii) of the OST Act - Issues are answered in favour of the Department and against the Assessee and it is held that the Tribunal was right in including the transport charges as part of the taxable turnover. As regards other issues, the Court finds that as a logical corollary of treating the contract as one composite contract where the elements of supply of ballast and its transportation are not separately treated, is that the Department could not have proceeded to reopen the assessment on the basis that the contract must be treated as only for supply of ballast, which should be construed as a ‘sale’ and nothing else. In other words, the entire consideration for the performance of the contract cannot be treated as a consideration for sale of ballast by the Assessee. Thus, the Tribunal erred in treating the entire sum received by the Assessee for the performance of the works contract to be sale consideration which would attract tax at 12% - the Court finds that there is no justification in reopening of the assessment. In effect, this Court affirms the order of the ACST while setting aside the orders of the STO and the Tribunal. The amount of tax already paid by the assesses will be adjusted while raising the final demand or refund of the excess amount as the case may be in accordance with the applicable rules - petition disposed off.
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