PRAKASH STORE Vs. COMMISSIONER OF SALES TAX ORISSA

JUDGEMENT

(1.) THE petitioner who is a registered dealer under the Orissa Value Added Tax Act, 2004 (for short, the Act ) is before this Court seeking issuance of writ of certiorary to declare that Section 4 (1) of the OVACT Act and Rule 41 (1) of the Orissa Value Added Tax Rules, 2004 (for short, the Rules ) are illegal, invalid and ultra vires the Constitution of India.

(2.) THE ground of attack for the said relief sought for by the petitioner is that the Taxing authorities are conducting frequent audits without describing the audit cycle in the Rules. Rule 41 is relevant for the purpose. Repeated conduct of audit amounts to harassment to the petitioner. The arbitrary power conferred on the assessing officer is violative of Article 14 of the Constitution. It is further contended that on the basis of such repeated audits conducted by the Department are in excess of the conferment of the power under Section 41 and Rule 41 of the Act and Rules. There is abuse of power conferred upon the Commissioner and the subordinate officers to whom power is delegated for the purpose of audit to prevent evasion of tax. It is further contended that as per Section 41 read with Rule 41 conducting audit without notice with regard to date place etc. is arbitrary on the part of the Commissioner and the subordinate officers to whom power is delegated to conduct audit in the premises of a dealer. Therefore, the same is arbitrary and vilative of Articles 14 and 19 of the Constitution and the same is liable to be struck down.

(3.) LEARNED Standing Counsel for the Revenue submits that power under section 41 and Rule 41 of the Act and Rules respectively are vested in the Revenue authorities for the purpose of facilitating the Commissioner and his subordinate officers to conduct audit with a view to see that the escapement of tax is brought to assessment in the interest of public. Section 41 of the Act envisages the Commissioner may selects such individual dealers or class of dealer for tax audit on random basis or on the basis of risk analysis or on the basis of any other objective criteria, as such intervals or in such audit cycle, as may be prescribed. Therefore, it is strongly submitted by Mr Kar that the said provisions of the OVAT Act being not violative of Article 14 of the Constitution, the writ petition is not maintainable. On the other hand, if the reliefs as sought for by the petitioner are granted, power of the Commissioner will not be there, which will leave adverse impact on the Revenue. Mr. Kar further submits that if there is any arbitraryaction on the part of the Revenue authorities in conducting audit with a view to harass the dealer, the same can be brought to the notice of the Commissioner. Moreover, the Audit Report is the clear subject matter of challenge, which can be scrutinized by the competent authority. Therefore, he submits that writ petition is liable to be dismissed. We have carefully examined the pleadings advanced by the petitioner with a view as to whether it is required to strike down the provisions contained in Section 41 and Rule 41 of the Act and Rules. The said point is answered against the petitioner -dealer for the following reasons. It is worthwhile to extract the provisions prescribed under Section 41 and Rule 41 of the Act and Rules, which read as under :