Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2006 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2006 (7) TMI 572 - HC - VAT and Sales TaxInitiation of a reassessment proceeding - notice issued u/s 12(8) of the Orissa Sales Tax Act, 1947 ("the OST Act") - Whether the expression "for any reason" in section 12(8) of the OST Act gives wider powers to the authorities to reopen assessment than the words "reasons to believe" and whether the exercise of power u/s 12(8) of the OST Act has to be consistent with the statutory rules and in accordance with the statutory forms framed under the said Act? - HELD THAT:- This court feels bound by the interpretation given to section 12(8) of the OST Act by the apex Court in Uttareswari Rice Mills [1972 (9) TMI 109 - SUPREME COURT] and which was subsequently followed in Ugratara Bhojanalaya [1992 (7) TMI 300 - ORISSA HIGH COURT]. Following the aforesaid ratio this court reiterates that the difference in phraseology between "for any reason" and "where the Sales Tax Officer has reasons to believe" does not make any material difference in view of the provisions in rule 23 of the said Rules which mandate that notice for reopening has to be in form VI and form VI uses the expression "where the Sales Tax Officer has reasons to believe". Thus, we hold that the words "for any reason" in section 12(8) of the OST Act do not give wider powers to the authorities to reopen assessment compared to words "reasons to believe" since the words "reasons to believe" are incorporated in the statutory form in which notice of assessment is to be issued. The court also holds that while exercising power u/s 12(8) of the OST Act, the authority has to act consistently with the statutory norms prescribed under the statutory rules and the forms. The importance of this doctrine lies in the fact that if a statutory functionary is vested with a power to act, it is that statutory authority alone who will form the necessary objective opinion for exercising its powers. In doing so, it may take into consideration whatever is relevant. As in the instant case, audit objection may be a relevant consideration. Taking that objection into consideration, the Sales Tax Officer has to form his objective opinion. But the Sales Tax Officer cannot totally abdicate or surrender his discretion to the objection of the audit party by mechanically reopening assessment u/s 12(8) as has been done in this case. This was frowned upon again by Justice Hegde again while delivering the judgment of the apex Court in Purtabpur Company Ltd. v. Cane Commissioner of Bihar [1968 (11) TMI 96 - SUPREME COURT. The Supreme Court quashed the order of the Cane Commissioner as it found that the Cane Commissioner virtually worked as the mouth-piece of the Chief Minister. In State of U.P. v. Maharaja Dharmander Prasad Singh [1989 (1) TMI 315 - SUPREME COURT], support of the principle that "a statutory authority cannot permit its decision to be influenced by the direction of others as that would amount to abdication and surrender of its discretion". The court laid down if an authority hands over its discretion to another and acts under the dictate of the other authority it acts ultra vires. Following these principles this court holds that the manner in which reassessment proceeding was blindly initiated on audit objection by the Sales Tax Officer without any independent application of mind, the exercise of power u/s 12(8) of the OST Act has been vitiated and as such the impugned notice of reassessment is liable to be quashed and is accordingly quashed. Annexure 1 is quashed. The writ petition is thus allowed.
|