STATE OF ORISSA Vs. SRI GURUMURTY PATRA

JUDGEMENT

(1.) ON applications made by the State of Orissa under section 24 (2) (b) of the Orissa Sales Tax Act, 1947 (hereinafter referred to as the Act), this court called for a statement of facts from the Additional Member, Sales Tax Tribunal (hereinafter referred to as the Tribunal) on the following question of law :

(2.) FACTS , in short, leading to these references are as follows : The assessee-opponent (hereinafter called the assessee) is alleged to be carrying on business in grocery articles, stationery articles, oil-cakes, ready-made garments and paddy in his village Sharadhapur in Nayagarh from 1955. Though the assessee's liability to pay sales tax had accrued, yet he had not registered himself as a dealer. Accordingly, a notice under section 12 (5) was served on him to produce his books of account. The assessee had no systematic accounts to produce. So the department held him liable from 1st April, 1960, and assessed him to tax for 14 quarters, i. e. , from 6/60 to 9/63. The total tax comes to Rs. 1,292 which includes penalty under section 12 (5) at the rate of Rs. 10 per quarter excepting the first. These assessments were based on the report of the Sales Tax Inspector, who visited the business premises of the assessee on 1st November, 1963, and seized some purchase invoices (34), slips (109) and a pocket note-book that disclosed the extent of business of the assessee. The assessee asserted that his daily sales ranged from Rs. 7 to Rs. 10 and, as such, he was not liable to tax. The assessee preferred first appeals against the assessments but without success. In second appeal before the Tribunal he contended that he was not dealing in paddy, oil-cakes, ready-made garments and there were no materials to determine his turnover to fix his liability to pay tax; that when he had been noticed indicating that his turnover exceeded Rs. 10,000 preceding 30th June, 1963, the assessments for quarters preceding were not valid and that he could be, if at all, only liable to pay tax from 1st April, 1963. The learned Tribunal held that in the notice under section 12 (5), the assessee had been called upon to pay tax from 1st April, 1963; that the dates mentioned in the notice were not due to any clerical error; and that to accept the department's suggestion that the notice included the liability to pay tax from 6/60 would necessarily cause prejudice to him. On the extent of business of the assessee, it held that there was nothing to show that the turnover of the assessee for a period of 12 months prior to 31st March, 1963, had exceeded Rs. 10,000. In this context, its findings were that (i) the appellate order does not show any transaction in the year 1962 or up to 31st March, 1963, of the year 1963; (ii) the determination of G. T. O. by the assessing officer at Rs. 12,000 was arbitrary in the absence of any satisfactory data or reasons therefor; and (iii) the assessee was selling kotha (belonging to the village) paddy and if the turnover of the sale of such paddy was excluded from the G. T. O. , it would never exceed Rs. 10,000 to attract liability and so it annulled the assessments till 31st March, 1963. It further held that if assessments till 31st March, 1963, failed, there was nothing to show subsequent liability from 1st April, 1963, and so finally annulled the assessments for the last two quarters, i. e. , 6/63 and 9/63 and directed refund of tax, if paid.

(3.) THE learned standing counsel for the department, Mr. S. C. Mohapatra, raised the following points :