SABITRI INDUSTRIES Vs. STATE OF ODISHA

JUDGEMENT

(1.) The present revision petition by the Assessee arises from an order dtd. 10/4/2008 passed by the Orissa Sales Tax Tribunal, Cuttack (Tribunal) in S.A. No.357 of 2006-07 whereby the Assessee's appeal was dismissed and the order dtd. 27/2/2006 passed by the Assistant Commissioner of Sales Tax (ACST), Cuttack-I Range confirming the assessment made under Sec. 12(8) of the Orissa Sales Tax Act, 1947 (OST Act) for the accounting year 2001-02 raising a demand of Rs.1,94,748.00and penalty of Rs.1,39,941.54 was affirmed.

(2.) The background facts are that the Petitioner had purchased paper and other materials from within and outside the State of Odisha and had prepared exercise khata. The original assessment was completed by raising a demand of Rs.25,048.00. Thereafter, it was reopened under Sec. 12(8) of the OST Act on the basis of a fraud case report submitted by the Vigilance Department, according to which the Assessee had procured goods worth Rs.5,36,875.00 from one Sri Ramesh Kumar Sikaria of Guwahati but had failed to reflect it in the purchase register. The explanation offered by the Assessee was that he had given a personal loan of Rs.5.00 lakhs to Mr. Sikaria and had recovered back the principal amount together with interest in an aggregate sum of Rs.5,36,875.00.

(3.) However, the Assessing Officer rejected the said contention and termed the loan transaction as purchase suppression. Accordingly, the gross taxable turnover (GTO) was enhanced by Rs.21,72,150.00which was four times the alleged suppression amount. On this basis, the tax amount was recomputed and penalty was also imposed.