ASSOCIATED CEMENT COMPANY LTD Vs. STATE OF ORISSA

JUDGEMENT

(1.) While admitting the revision petition on 6/7/2006 the following issue was framed by this Court:

(2.) The background facts are that the Petitioner during the relevant period was a wholly owned Government of Orissa undertaking engaged in the manufacturing and sale of cement. For the purpose of its activities, the Petitioner had go downs in different areas. One such godown is located at Berhampur. On 8/7/1992 the Inspector of Sales Tax visited the godown of the Petitioner's company, which was earlier M/s. Hira Cement Works, along with the Sales Tax Officer, (STO) Ganjam-I, Circle. During the course of the said visit the officers of the department verified the books of accounts including the stock register at the godown of the Petitioner-Company. The Inspector of Sales Tax found 37 slips of paper along with one diary from the godown premises and noticed certain entries made therein, on which basis, the STO, Ganjam submitted a report to the STO, Sambalpur-II Circle stating therein that the Petitioner is indulged in sale suppression for the year 1991-92 and 1992-93. He quantified the excess stock for 1991-92 at 1722 bags and for 1992-93 the excess stock of cement was quantified as 1239 bags. A fraud report dtd. 24/7/1992 was prepared by the Inspector Sales Tax (IST), Ganjam-I Circle for the year 1991-92. The assessment was re-opened under Sec. 12(8) of the OST Act.

(3.) The Assessing Officer completed the reassessment confirming the demand of Rs.1,33,600.00. The assessee filed an appeal before the Orissa Sales Tax Tribunal (Tribunal), which was registered as S.A. No.7090 of 1994-95. The said appeal was allowed by the Tribunal by order dtd. 14/5/2002, holding there was no conclusive evidence of any sale suppression of cement at the Berhampur godown. Further the mere fact of stock discrepancy was not sufficient to reject the books of accounts unless a positive instance of sale suppression was established. It was held that the whole exercise was on presumption and surmises. There was no corroborative evidence to establish the suppression of sales.