TMI Blog1982 (2) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... n law to sustain the enhancement of the turnover of Rs. 30,000 as was done by the assessing officer?" The two reference applications relate to the periods 1972-73 and 1973-74. The assessee is a registered dealer under the Orissa Sales Tax Act, 1947, and has his business in cloth and hosiery articles on wholesale basis in Bhadrak in the district of Balasore. In the course of assessment for these periods, the Sales Tax Officer found: ".........It was reported by the Investigation Unit of the Intelligence Wing, Balasore, that on their verification of the seized documents of M/s. Mannalal Prabhudayal, Chandan Bazar, Bhadrak, it was detected that the dealer (M/s. Muralimanohar Prabhudayal) had received Rs.4,000 on 7th May, 1973, which had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of the argument, the only point for consideration is whether the appellant has been confronted with the materials that were found from the accounts of the other dealer regarding the appellant's transaction dated 7th May, 1973. In this connection, the statement recorded from the appellant's partner at the time of assessment is relevant: 'The Sales Tax Officer read out the statement of Sri Mannalal Gupta, the partner of M/s. Mannalal Prabhudayal dated 7th May, 1973, regarding his payment of Rs. 4,000 to our firm on 7th May, 1973. My accounts do not reveal the receipt of Rs. 4,000 on the said date. But the ledger accounts of that firm revealed payment of Rs. 4,000 to my firm on 4th January, 1973, against his cash loan of Rs. 4,000 on 3rd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of natural justice were completely satisfied. There is no necessity beyond confrontation to give any specific notice to the assessee that the assessing officer intended to utilise the material so collected against the assessee. On the other hand, the counsel for the assessee placing reliance on three decisions of this Court to which we shall presently make reference contends that in the circumstances as present here the assessing officer has two obligations, namely, (i) to put the assessee to notice of the information collected and (ii) also to give notice to the assessee that he has the intention of utilising such material against him. In Muralimohan Prabhudayal v. State of Orissa [1970] 26 STC 22, which was a case of the present assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the rest of the judgment the court considered that aspect only. From this analysis of the decision it is clear that there is nothing very material available for being used in favour of the assessee from it. The next case relied upon on behalf of the assessee is that of Ram Chandra Maikap v. State of Orissa (1972) 2 CWR 1913. A Bench of this Court quoted with approval the principle laid down in Seth Gurmukh Singh v. Commissioner of Income-tax [1944] 12 ITR 393, where it was observed: "........The very nature of the proceedings conducted by him (Income-tax Officer) necessitates the use of such media for collecting information as he may not like to disclose to the assessee and he is perfectly within his right if on enquiry by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the absence of the examination of the Inspector to support his report, the books of the assessee could be discarded once the assessee took the stand that there had been no detection?" In paragraph 7 of the judgment, after referring to Ram Chandra Maikap's case (1972) 2 CWR 1913, it was observed: "In Banwarilal Sitaram v. State of Orissa [1976] 37 STC 595; 1974 Tax LR 1960, a Division Bench of this Court has also held that the assessing authority is bound to disclose to the assessee any material collected by him which is adverse to the assessee and he is going to utilise the same against the assessee. The assessee is expected to meet such ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld arise his obligation to place materials before the assessing officer with a view to disabusing his mind, if possible, as indicated in the Lahore case [1944] 12 ITR 393. We are not prepared to accept that there is any obligation on the assessing officer to put the assessee to notice that he is going to utilise the adverse material against him. 3.. Admittedly, there had been confrontation and once there has been disclosure of the material, the rules of natural justice must be taken to have been satisfied and the action of the assessing officer cannot be called in question for want of notice to the assessee that such material was going to be utilised against him. The Tribunal clearly went wrong in culling out from the reported decisions s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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