TMI Blog2021 (9) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry as the authorised officer concerns may consider necessary. In that case, the sum had been collected on 4th February, 2008 even before the Petitioner could reply to the show cause notice issued to it on 2nd February, 2008. In the Present case, the situation appears to be even worse while the collection of tax and penalty took place on 10th April, 2007, the assessment order itself was passed subsequently on 16th April, 2007. However, no show cause notice was issued to the Petitioner at any time prior to the collection of the above amount on a surprise inspection. It is plain from the second proviso to 16-D (5) of the OST Act that it envisages payment of the amount of tax by the person affected in respect of such goods to be asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inspection undertaken of his business premises on 10th April, 2007 without passing any assessment order? 2. The facts in brief are that the Petitioner holds a valid VAT registration and an Entry Tax (ET) registration and is in the business of processing and sale of jewellery. On 10th April 2007, the STO accompanied by the DSP, Vigilance and other police personnel conducted a surprise check in the Petitioner s business premises. According to the Petitioner, the inspecting party insisted on his producing the books of account but these were not immediately available as they had been submitted to the STO, Jajpur Circle for the purpose of registration. The Petitioner s allegation is that he was made to sign on a statement under duress and coe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, points out that in an identical circumstances, this Court had in M.G. Garments v. Sales Tax Officer, Investigation Unit, Bhubaneswar and others, [2009] 19 VST 372 (Orissa) held that any collection of tax and penalty upfront without a show cause notice (SCN) would be violative of Section 73(10) of the OVAT Act. In that case too while holding the action of the Department to be illegal, it was held that the dealer was entitled to refund of the amount so collected. 7. In response, Mr. Mishra, learned Additional Standing Counsel, refers to the statement purportedly given by the Petitioner on his own accord on 10th April, 2007 to the Sales Tax authorities at the time of the surprise inspection. According to Mr. Mishra, since all the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been collected on 4th February, 2008 even before the Petitioner could reply to the show cause notice issued to it on 2nd February, 2008. In the Present case, the situation appears to be even worse while the collection of tax and penalty took place on 10th April, 2007, the assessment order itself was passed subsequently on 16th April, 2007. However, no show cause notice was issued to the Petitioner at any time prior to the collection of the above amount on a surprise inspection. 10. The reliance by Mr. Mishra on the judgment in Dutta Traders (supra), appears to be misplaced for more than one reason. First, the said decision concerns an action taken under Section 16-D of the Orissa Sales Tax Act, 1947 (OST Act). Secondly, Section 16-D of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assessed indicate the legislative intent that the assessment could follow the payment of the tax and penalty at the time of the seizure of such goods. However, under Section 73(10) of the OVAT Act, the issuance of a SCN prior to the action is mandatory. The language of the provision itself makes this abundantly clear that the action would be taken after giving the dealer an opportunity of being heard and after holding such further enquiry .. Therefore, the question of first collecting the tax and penalty upfront under Section 73 (10) of the OVAT Act and then assessing the person from whom the amount was collected, is not permissible in law. 12. Consequently, the Court of the view that the decision in Dutta Traders (supra) is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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