TMI Blog2016 (3) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... n given. Therefore, as no reasonable opportunity has been given to the opposite party to pass order under section 12(8) of the Act, the Tribunal's order is valid. - Decided against the appellant - S. T. Rev. Nos. 89, S. T. Rev. Nos. 90, S. T. Rev. Nos. 91, S. T. Rev. Nos. 92 of 2011 - - - Dated:- 3-8-2015 - I. Mahanty and Dr. D. P. Choudhury, JJ. For Petitioner : M. S. Raman, Additional Standing Counsel (Commercial Taxes) JUDGMENT The petitioner has filed these revisions under section 24(1) of the Odisha Sales Tax Act, 1947 (hereinafter for short the Act ) challenging the order dated 20.4.2009 passed Orissa Sales Tax Tribunal (DIVISION BENCH-II), Cuttack in S.A. Nos. 71 to 74 of 2002-2003 preferred by the opposite party for the assessment period from 1995-96 to 1998-99. Since four revisions are filed out of single order, they are being disposed of by this common order. FACTS : 2. The unsworn details of the case of the petitioner are as follows:- The opposite party who is a registered dealer under the Act deals in Milton, Hawkins, Aristocrate, Eagles, Curlon, Sumeet Grinder, air cooler, Electrical Appliances, Plastic furnitures etc. on retail and semi-wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the sale by the learned Assessing Authority is bad in law, dispelling the argument of the opposite party learned First Appellate Authority confirmed the order of the learned Assessing Authority by observing that the assessment was made on the basis of the stock position reported by the appellant to the Income Tax Department, the inventory of the physical stock was made on 30.6.2001. 4. Against the order of the learned First Appellate Authority, Second Appeal was preferred by the opposite party before the Orissa Sales Tax Tribunal (DIVISION BENCH-II), Cuttack. The Tribunal vide order dated 28.2.2011 passed in S.A. Nos. 71 to 74 of 2002-2003 framed the point in issue as to whether the order of the learned ACST confirming the orders of assessment of escaped sales tax passed by the STO against the appellant for the periods 1995-96, 1996-97, 1997-98 and 1998-99 is erroneous and is to be annulled ? After discussing at length in the judgment, learned Tribunal held that the learned Assessing Authority should have formed the independent opinion so far as escaped sales tax is concerned. The Tribunal also observed that this Court in the case of Indure Limited v. Commissioner of Sales T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, must abide by the facts found by the authority below. But instead, it went on observing opinion on facts without relying upon the record which shows that there is suppression of sale turn over by the opposite party. On the otherhand, learned Tribunal has erred in law by observing that the enhancement of tax without material of sale suppression by the opposite party, was unlawful because there are lot of materials produced basing on which re-assessment was made and the opposite party was found to have suppressed the material. Therefore, Mr. Raman, learned Additional Standing Counsel (Commercial Taxes) submitted to set aside the orders of the learned Tribunal and to restore the order of the learned Assessing Authority. 7. Learned counsel for the Opposite Party submitted that the opposite party being the dealer, has submitted selfassessed Form showing the bills of purchase and sale. He further submitted that on the sales tax, the order of the Tribunal is correct and legal and prayed the same should be confirmed and the revision should be dismissed. DISCUSSIONS : 8. We have carefully considered the submission of the respective counsel and perused the records to apprise ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding by ignoring the material adduced before them. On the other hand, it is found from the order passed by the Tribunal, impugned herein, that the tax turn over of a dealer cannot be enhanced for levy of sales tax merely on suspicion. We also endorse this view and observe that mere suspicion, however major may be, cannot substitute legal proof. It is reiterated that there is nothing found from the orders of re-assessment or the First Appellate Authority that the stock entry or any other material was considered independently to find out the escaped tax liability of the opposite party. 9. At this stage, it is required to go through the provision under section 12(8) of the Act as the re-assessment has been made under section 12(8) of the Act. Section 12(8) is reproduced herein below : 12(8) : If for any reason the turnover of a dealer for any period to which this Act applies has escaped assessment or has been under assessed or where tax has been compounded when composition is not permissible under this Act and the Rules made thereunder the Commissioner may at any time within five years from the expiry of the year to which that period relates call for return under sub-section(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e opportunity of being heard to pay the tax as per the principle of best judgment. Therefore, the prerequisite under section 12(8) is compliance of section 12(5) of the Act. In the instant case as discussed above, we have already observed that vide order dated 17.8.2001 (Annexure-7) the Assessing Authority has taken view from the report dated 26.12.2000 (Annexure-1) that a prima facie case under section 12(8) culled out. This observation of the Assessing Authority smacks the provision of law inasmuch as without giving any short of opportunity, the Assessing Authority has accepted the Audit Assessment Report and found that there is a prima facie case under section 12(8) of the Act against the opposite party. Moreover, neither the written statement nor any short of oral statement of the opposite party find place in the re-assessment order passed by the learned Assessing Authority. The reasons given in the escaped assessment order, does not disclose how much tax turn over has been suppressed by the petitioner. Equally the First Appellate Authority has also not considered whether the reasonable opportunity has been given to opposite party on letter and spirit for which the order passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 under section 12(8) as has been done in this case. With due respect to the said decision, it is found that the Sales Tax Officer has to form his objective opinion by taking the evidence of the opposite party into consideration. But in the instant case no enquiry, independent of the report filed against the opposite party by the Income Tax Department, has been considered. We are of the opinion that the ratio decidendi of this case, squarely applies to the facts and circumstances of the case. Relying on such settled law in the above decisions of Hon ble Apex Court and this Court with the provisions of law as discussed above, we are further of opinion that the learned Tribunal has rightly observed that the conclusion arrived about escaped assessment, is based on suspicion and no opportunity has been given and adding to that, we are of the view that no reasonable opportunity has been given to the oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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