9911796707
TMI Blog2008 (5) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the assessment year 2000-01, the petitioner filed its return under the CST (O) Rules in form I, inter alia, disclosing its inter-State sales at Rs. 7,09,74,937.64. Subsequently, the petitioner filed revised return for the said assessment year at the time of hearing of the original assessment case disclosing turnover of inter-State sale to the tune of Rs. 4,27,52,517.96. Vide assessment order dated March 23, 2005, the assessing officer did not accept the revised return on the ground of delay in submitting the revised return and assessed the petitioner at the figure stated in the original return wherein the inter-State sale was stated to be Rs. 7,09,74,937.64. Being dissatisfied with the said assessment order, the petitioner filed an appeal before the first appellate authority which was dismissed by the latter by its order dated December 26, 2005 passed in First Appeal No. AA-(C)24/CUIE/2005-06. Against the said order, second appeal was filed in Orissa Sales Tax Tribunal. While the second appeal was pending before the learned Tribunal, the assessing officer issued a notice on December 29, 2006 under rule 10 read with rule 12(8) of the CST (O) Rules, 1957 to the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same are not export as understood in section 5 of the CST Act. This amount is related to stock transfer of the company to outside the State of Orissa. Thus the transaction as disclosed in the annual revised return in respect of inter-State sale is for value of Rs. 4,27,52,517.96 and the balance amount shown as stock transfer from Paradeep to outside the State of Orissa. But the dealer-company has furnished a statement in respect of stock transfer showing the value of stock transfer as Rs. 3,31,63,04,081.97. Accordingly, the dealer-company has furnished "F" form for Rs. 3,31,63,04,081.97. Basing on the statement furnished by the dealer, assessment has been completed considering the "F" forms submitted by the dealer for stock transfer of Rs. 3,31,63,04,081.97. But for the balance amount of Rs. 3,00,62,80,349.31 there is neither conclusive claim nor documentary evidences that the goods dispatched outside the State through Paradeep port are otherwise than by way of sale. But the fact is that the dealer-company has never disclosed the transactions effected through Paradeep terminal neither in the return nor at the time of assessment. But on the other hand information received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hand the dealer has furnished misleading statement/figure to keep away the facts and figure to the assessing officer at the time of original assessment. This time also the dealer-company was asked to furnish certain limited information for re-assessment. In spite of the reasonable opportunity given, the dealer failed to furnish any evidences as asked for. Thus it is understood that the dealer is deliberately avoiding to give true and correct picture of transaction related to their business. Thus it is felt proper to complete the assessment basing on the facts and figure available in the record as the substantial amount of revenue is involved in this case. Considering the facts as discussed, assessment is made enhancing the gross turnover by adding the value towards the goods which were dispatched from Paradeep and delivered to other oil companies at the port of destination and so also the quantity shown as stock transfer in the return but failed to furnish any documentary evidence as inter-State sale. It is concluded that the dealer is liable to pay tax towards inter-State sale suppression of 185785 kl of HSD valued at Rs. 3,34,41,31,000 and 28959 kl of SKO valued at Rs. 23,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be two turnover figures for the same assessment year. There can be only one operative assessment order in a particular form at one point of time governing the same assessment year. While developing his argument on the aforesaid preliminary issue, the learned counsel for the petitioner submitted that the subject-matter of assessment and reassessment is turnover. In earlier order of assessment, the turnover for the period 2001-02 was assessed at Rs. 7,09,74,937.64. He further submitted that rule 12(8) of the CST (O) Rules contemplates a second return and a second assessment order. However, what is not contemplated is that there should be two assessment orders for the same year. At the same point of time, there cannot be two operative assessment orders, as in the present case there is an order of assessment of the Assistant Commissioner and a reassessment order of the Sales Tax Officer. It was argued that it is not the intention of the Legislature to enable the Sales Tax Officer to reopen final decisions passed by a higher authority, otherwise it would be destructive of the hierarchy. The lowest rank officer cannot be permitted to get round the order of the higher authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re as follows: (i) Whether the original assessment order dated March 23, 2005 passed by the assessing officer merged with the appellate order dated December 26, 2005 by operation of doctrine of merger? If so, whether the assessing officer assumes jurisdiction under rule 12(8) of the CST (O) Rules to assess the turnover escaped assessment from the original assessment order dated March 23, 2005 by issuing notice under that rule on the basis of new/fresh material which was not before him at the time of original assessment, but it came to light only after completion of the original assessment? (ii) Whether the appellate authorities in exercise of their power to enhance the assessment, can take into consideration the fresh or new material which was not before the assessing officer but has come to light only after completion of the assessment while disposing of the appeal arising out of the original assessment? (iii) Whether by exercising power of revision the Commissioner can consider any new or fresh material which was not before the assessing officer, but came to light only after completion of the assessment? To deal with the above questions, it is necessary to know what is contem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petroleum Corporation Limited, Sikharpur, Cuttack bearing TIN 21951201791/CUCIE.708 Sub: Reasons for reopening of assessment for the year 2001-02 under the CST Act. A notice under rule 10 of the CST (O) Rules, 1957 for the year 2001-02 is enclosed. Reasons for re-opening the assessment are as stated below: (a) It has come to the notice that you have brought in 329178 kl of HSD and 43009 kl of SKO during the year 2001-02 to the Lighterage Terminal at Paradeep. During the same period you have dispatched 185785 kl of HSD and 28959 kl of SKO to outside the State of Orissa. (b) Information received further shows that during the year, you have sold goods in course of inter-State trade or commerce from Paradeep Lighterage Terminal to other oil companies. (c) The returns for the year 2001-02 under the CST Act do not appear to reflect these transactions of Lighterage terminal. The same were also not disclosed during the assessment completed for the year. The aforesaid position indicates that there is escapement of assessment during the year. Besides the books of account and documents on which you may rely in support of the contentions, you are required to produce the 'tanker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; In order to deal with the first question it is necessary to know what is the doctrine of merger. According to Law Lexicon "the doctrine of merger arises only when there are two independent things and the greater one would swallow up or may extinct the lessor one by process of absorption." The honourable Supreme Court in the case of Amba Bai v. Gopal reported in [2001] 5 SCC 570 held that if the judgment or order of an inferior court is subjected to an appeal or revision by the superior court and in such proceedings the order or judgment is passed by the superior court determining the rights of the parties, it would supersede the order or judgment passed by the inferior court. The juristic justification for such doctrine of merger is based on the common law principle that there cannot be, at one and the same time, more than one operative order governing the subject-matter and the judgment of the inferior court is deemed to lose its identity and merges with the judgment of the superior court. Thus, according to the honourable apex court there cannot be more than one operative order governing the subject-matter at the same time. The honourable Supreme Court in the case of State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rise. In the case of State of Orissa v. Ugratara Bhojanalaya reported in [1993] 91 STC 76 (Orissa) relied on by the petitioner, this court while dealing with section 12(8) of the Orissa Sales Tax Act, in paragraph 6 of the said judgment, held that a juristic justification of doctrine of merger may be sought on the principles that there cannot be at one and the same time more than one operative orders governing the same subject-matter. Therefore, the doctrine of merger is attracted only in the case of the same subject-matter. Apart from the above, that judgment has been rendered in different facts and circumstances. In that case, this court further held that for the year 1976-77 the assessee was assessed to tax. In appeal, assessment orders were nullified by relying on the decision of the honourable Supreme Court in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386. Notices were issued under section 12(8) of the Act thereafter to re-open the assessment and the stand of the Revenue was that the subsequent decision of the honourable Supreme Court of India in Northern India Caterers (India) Ltd. v. LT. Governor of Delhi [1980] 45 STC 212 was not taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate authority if needed. Separate provision has been made to assess turnover which escaped assessment from the original assessment or in case of under-assessment at the time of passing of original assessment order. The limitation provided for issuing notice in respect of such escaped turnover is five years from the relevant assessment year whereas no such time-limit has been prescribed for disposing of the appeals by the first appellate authority or the second appellate authority. Thus, the intention of the Legislature is very much clear that irrespective of the original assessment and continuation of the same in appeal a separate/independent assessment proceeding can be initiated in respect of the turnover which escaped assessment from the original assessment. The Sales Tax Act provides levy of tax on sale of taxable goods during a particular period under the provisions of the statute. The same may be taxed in one order or more than one orders as has been done in the present case, i.e., by an order passed under rule 12(5) and by an another order under rule 12(8) of the CST (O) Rules. What is important and required under the law is that the self-same transaction of purchase or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence as regards the applicability of principles of merger. The appellate authority under the Income-tax Act as well as the Sales Tax Act has jurisdiction to consider and decide even that part of the order of the assessing authority against which no appeal has been preferred. But when the appellate authority does not touch any part of the order of the assessing authority, order of the assessing authority to that extent cannot be held to have merged with the order of the appellate authority. The learned Senior Counsel appearing for the Revenue also placed reliance on the judgment of the honourable Supreme Court in the case of State of Orissa v. Krishna Stores reported in [1997] 104 STC 594 where the honourable apex court held at page 600 as follows: ". . . Basically, therefore, unless the appellate authority has applied its mind to the original order or any issue arising in appeal while passing the appellate order, one should be careful in applying the doctrine of merger to the appellate order." In the case of Gojer Brothers (P) Ltd. v. Ratan Lal Singh reported in AIR 1974 SC 1380 the honourable apex court held that the subject-matter of the suit and subject-matter of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. They cannot decide any issue which was not considered by the assessing officer in the assessment order. Thus, the subject-matter on the basis of which reassessment proceeding is initiated being not before the assessing officer, same cannot be considered by the appellate authorities for the purpose of enhancement. We are therefore of the considered view that the appellate authorities while disposing of the appeal arising out of an assessment order cannot take into consideration any fresh or new material which was not before the assessing officer but subsequently comes to light after completion of the assessment for the purpose of enhancement of the assessment. The third question which falls for consideration is whether by exercising power of revision the Commissioner can consider any new or fresh material which was not before the assessing officer, but came to light only after completion of the assessment? Under the provisions of the Act, the Commissioner of Sales Tax on his own motion has power to revise any order made under the statute by any taxing authority other than the Tribunal. This power of the Commissioner is suo motu revisional power. The Commissioner is empowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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