TMI Blog2011 (9) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of limitation was in operation. Therefore, the stand now taken by the assessee is not acceptable and we are of the view that the impugned orders of assessment have been passed within the period of limitation. We set aside the orders of assessment passed under annexure 1 in both the aforesaid writ petitions and remand the matter for fresh assessment by the competent assessing authority having jurisdiction over the dealers assigned to LTUs, who is in no way connected with the tax audit of the petitioner. However, we make it dear that we have not expressed any opinion on the merits of the cases except on the question of limitation and jurisdiction/authority of Joint Commissioner of Sales Tax who has passed the impugned assessment orders. The fresh assessment process shall be completed within a period of eight weeks from today after giving opportunity of hearing to the petitioner-dealer. - W. P. (C) Nos. 6701, W. P. (C) Nos. 6702 of 2011 - - - Dated:- 6-9-2011 - GOPALA GOWDA V. C.J. AND MAHAPATRA B.N. J. B.K. Mahanti, Senior Advocate, for the petitioner R.P. Kar, Standing Counsel, for the respondents JUDGMENT In W. P. (C) No. 6701 of 2011 challenge ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, Orissa, in exercise of powers conferred on him under rule 4(7) of the OVAT Rules assigned the records of the petitioner-dealer to the jurisdiction of Jaipur Range, the Larger Taxpayers' Unit (for short, LTU ) constituted in the said Range vide Notification No. 14394-III(III) 32/2007-CT dated September 5, 2007. The impugned orders of assessment have been passed by opposite-party No. 2-Joint Commissioner of Sales Tax, Jaipur Range, who is not competent to assess the petitioner. The orders of assessment being passed by an authority who is not vested with authority and jurisdiction to assess, the same are liable to be quashed. It is further submitted that the orders of assessment have been passed violating the principles of natural justice. A close glance at the audit visit report under annexure 2 and notice in form VAT-306 for audit assessment under annexure 3 series would reveal that conspicuously the opposite-party No. 2-Joint Commissioner of Sales Tax himself having approved the audit visit report on January 18, 2010 has proceeded to assess the petitioner. It is a clear case of bias as opposite-party No. 2 has acted both as the investigator and adjudicator. In support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner on February 16, 2011, the same are hit by provisions of limitation stipulated in the statute. Placing reliance on the judgment of the honourable Supreme Court in the case of P. K. Ramachandran v. State of Kerala [1997] 7 SCC 556, Mr. Mahanti, contended that the law of limitation may harshly affect a particular party but it has to be applied with all its rigor when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. Placing reliance on the judgment of the Punjab and Haryana High Court in the case of Shreyans Industries Limited v. State of Punjab [2008] 18 VST 493 (P and H), Mr. Mahanti contended that the Commissioner is required to exercise his power of extending time for completion of assessment before the assessment becomes time-barred. There is no question of deferring an assessment which has already become time-barred. Placing reliance on the judgment of the honourable Supreme Court in the case of Ahmedabad Manufacturing and Calico Printing Co. Ltd. v. S. G. Mehta, Income-tax Officer [1963] 48 ITR 154 (SC), Mr. Mahanti contended that the rule that an Act did not have retrospective operation on substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the audit team as has been contended.The audit visit report dated December 5, 2009 was submitted by a team led by Sri S.R. Mishra, the then ACCT, Barbil Circle, on January 18, 2010. Opposite-party No. 2 has signed at the end of the audit visit report as a token of receipt of the report. The receipt of the audit visit report is an administrative act. The receipt of the report is for the, limited purpose of onward transmission of the same to the assessing authority. Alternatively, Mr. Kar, learned standing counsel, submits that in case this court feels that opposite-party No. 2 is not a competent authority to make assessment, the present matter may be remanded to any other competent officer having jurisdiction over the dealers assigned to LTUs, who is no way connected with the tax audit of the petitioner. It was further contended that since there is availability of alternative remedy by way of filing appeal under the OVAT Act, the present writ petitions are not maintainable. On February 22, 2010, the petitioner received the notice dated February 10, 2010 sent along with the audit visit report. Originally, the date was fixed for appearance of the assessee-dealer on March 10, 2010, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court is binding on the assessing officer who has acted as per the decision of this court. According to Mr. Kar, the assessment has rightly been completed within one year from the date of receipt of the audit visit report by the dealer. It was further argued by Mr. Kar that sub-section (6) of section 42 of the OVAT Act was amended by the Orissa Value Added Tax (Amendment) Act, 2010 and in place of words receipt of the words service of notice on the dealer were replaced. The aforesaid amendment in the nature of clarification in which the real intention of the Legislature can be fully comprehended and the real intention of the Legislature before amendment was interrelated in the sense that the period of six months or one year as the case may be is required to be counted from the receipt of audit visit report by the dealer along with notice of assessment. The clarification was necessary to avoid confusion and is in effect conceptually and contextually same to the view expressed by this honourable court. Placing reliance on the judgment of the apex court in the case of Manickam and Co. v. State of Tamil Nadu [1977] 39 STC 12 (SC), Mr. Kar contended that subsequent amendment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival contentions of the parties, the following questions fall for consideration by this court: (i) Whether opposite-party No. 2-Joint Commissioner of Sales Tax having approved the audit visit report is competent to assess the petitioner ? (ii) Whether the impugned orders of assessment are barred by limitation under section 42(6) and (7) of the OVAT Act, 2004 ? (iii) Whether the demand raised in the orders of assessment on the ground of suppression of sale is without any valid reason ? So far as question No. (i) is concerned, the specific case of the petitioner is that on perusal of the audit visit report and the orders of assessment, it reveals that opposite-party No. 2 who has approved the audit visit report on January 18, 2010 has passed the impugned orders of assessment. Therefore, it is clear that opposite-party No. 2 has acted both as investigator and adjudicator. According to Mr. Kar, opposite-party No. 2 is not the head of the audit team as has been contended by the petitioner. The audit programme was approved by the Commissioner and accordingly, opposite- party No. 2-Joint Commissioner of Sales Tax constituted an audit team to conduct the audit. Opposite- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision under this Act, an assessment under this section shall be completed within a period of six months from the date of receipt of this audit visit report: Provided that if, for any reason, the assessment is not completed within the time specified in this sub-section, the Commissioner may, on the merit of each such case, allow such further time not exceeding six months for completion of the assessment proceeding. This court in the case of Lakhand Jewellers Pvt. Ltd. (W. P. (C) No. 11864 of 2007 decided on October 9,,2007-Orissa High Court) held that such limitation shall run from the date of receipt of the audit visit report by the dealer. Mr. Mahanti, learned senior .counsel, submitted that this court in Lakhand Jewellers Pvt. Ltd. (W. P, (C) No. 11864 of 2007 decided on October 9, 2007-Orissa High Court) made a passing remark regarding limitation and was not expression of any, opinion o 'law. For better appreciation of the fact, it is necessary to extract the relevant paragraphs from the order dated October 9, 2007 passed in the case of Lakhand Jewellers Pvt. Ltd. (W. P,(C) No. 11864 of 2007 decided on October 9, 2007-Orissa High Court: The learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(6) held that unless the petitioner succeeds in establishing that it has received the audit, visit report six months earlier than the date of orders of assessment, the provisions of section 42(6) ate not attracted. The above order of this court has not been challenged and therefore, it has attained its finality. Needless to say that the order passed by this court is binding on the subordinate judiciary, Tribunals and quasi-judicial authorities. The honourable Supreme Court in the case of East India Commercial Co. Ltd., Calcutta v. Collector of Customs, Calcutta AIR 1962 SC 1893, held as follows: 29. . . . Under article 215, every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Under article 226, it has a plenary power to issue orders or writs for the enforcement of the fundamental rights and for any other purpose to any person or authority, including in appropriate cases any Government, within its territorial jurisdiction. Under article 227 it has jurisdiction over all courts and Tribunals throughout the territories in relation to which it exercises jurisdiction. It would be anomalous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within six months and the assessing officer sought for extension of time from the Commissioner and the Commissioner extended the time to complete the audit assessment by February 9, 2011 positively. Although the Commissioner could have extended the time till February 21, 2011, i.e., one year from the date of receipt of the audit visit report by the dealer-assessee, the assessment in the instant case has been completed on January 21, 2011. When the impugned orders of assessment were passed, the judgment of this court on the period of limitation was in operation. Therefore, the stand now taken by the assessee is not acceptable and we are of the view that the impugned orders of assessment have been passed within the period of limitation. Law is well-settled that a decision by two judges has a binding effect on another co-ordinate Bench of two judges, unless it is demonstrated that the said decision by any subsequent change in law or decision ceases to be laying down a correct law. (See Government of Andhra Pradesh v. B. Satyanarayan Rao (dead) by LRs [2000] 4 SCC 262). In view of the decision of this court directly on the point of limitation provided under section 42(6) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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