CHINU TRADERS Vs. SALES TAX OFFICER, BARGARH CIRCLE

JUDGEMENT

(1.) There are two grounds on which these Petitioners have approached the Court seeking reliefs against the Sales Tax Department (Department). One is that the audit visit report was not submitted within seven days of the visit and the second is that contrary to the decision of this Court in M.G. Garments v. Sales Tax Officer, Investigation Unit (2009) 19 VST 372 (Ori), penalty amount was collected by the audit visit team at the time of the visit itself without any previous show cause notice to the Petitioners.

(2.) As far as first issue is concerned, it is seen from the copy of the audit visit report form that the visit in fact took place on 19/7/2006 whereas the report itself appears to have been prepared only on 10/8/2006 and submitted much later some time in September, 2006. Clearly, therefore the audit visit is beyond the mandatory period of seven days. Recently, this Court in its order dtd. 10/5/2022 in W.P.(C) No.7753 of 2010 (M/s. Kanika Furniture (P) Limited, Balasore v. Joint Commissioner of Commercial Taxes, Balasore) had in similar circumstances held that the failure to submit the audit visit report within seven days of the visit of the audit visit team, would be in violation of Sec. 41 (4) of the OVAT Act read with Rule 45 (3) of the OVAT Rules.

(3.) Consequently, the audit visit reports in both these cases are hereby quashed and all proceedings and orders consequential thereto are also hereby quashed.