CHANDRIKA SAO Vs. SALES TAX OFFICER

JUDGEMENT

(1.) This writ petition has been filed with a prayer for quashing the order of assessment dated 18.6.2008 (Annexure-1) passed by opposite party no. 2-Assessing Authority under Section 42 of the Orissa Value Added Tax Act, 2004 (hereinafter referred to as "OVAT Act") for the tax period from 1.4.2005 to 30.11.2006 on the ground that the said order is barred by limitation and has been passed without complying with the statutory requirement of Section42 (2) of the OVAT Act and is in gross violation of the principles of natural justice.

(2.) The petitioner's case in nutshell is that it is a proprietorship concern dealing with gunny bags on wholesale basis and it is registered under the OVAT Act. It has filed its return for the tax period from 1.4.2005 to 30.11.2006. Opposite party no. 1-Sales Tax Officer, who is the head of the Audit Team, after conducting audit at the business premises of the petitioner for the aforesaid tax period submitted the Audit Visit Report to the Assistant Commissioner of Sales Tax on 12.12.2006 for completion of audit assessment under Section 42 of the OVAT Act. On the basis of the Audit Visit Report, opposite party no.2-Assessing Authority issued notice to the petitioner in Form VAT-306 under memo no. 6477 dated 23.8.2007 enclosing the Audit Visit Report dated 12.12.2006 for the aforesaid tax period. The Assessing Authority vide its order dated 18.06.2008 passed an ex parte assessment order under Section 42 of the OVAT Act for the aforesaid tax period raising a demand of Rs. 38,03,766/- which includes penalty of Rs. 25,35,844/-. The said assessment order was issued under Memo No.4774 dated 24.10.2008 and was received by the petitioner on 24.11.2008. Hence, the present writ petition.

(3.) Mr. P.K. Jena, learned counsel appearing for the petitioner submitted that as per sub-section (6) of Section 42 of the OVAT Act, an assessment under Section 42 of the OVAT Act shall be completed within a period of six months from the date of receipt of the Audit Visit Report, but the proviso to sub-section (6) says that if for any reason, the assessment is not completed within the time specified in sub-section (6) i.e. within six months from the date of receipt of the Audit Visit Report, the Commissioner may, on the merit of each such case, allow such further time not exceeding six months for completion of the assessment proceeding. Sub-section (7) of Section 42 provides that no order of assessment shall be made under sub-section (3) or sub-section (4) of Section 42 of the OVAT Act after expiry of the period of one year from the date of receipt of the Audit Visit Report. The Audit Visit Report having been submitted on 12.12.2006, the last date for completion of the audit assessment under Section 42 of the OVAT Act expired on 11.06.2007. The assessment order under Annexure-1 having been passed on 18.6.2008, it is clearly barred by limitation prescribed under sub-section (6) of Section 42 of the OVAT Act. Hence, the said order of assessment is liable to be quashed. Mr. Jena further contended that the notice for audit assessment under Section 42 of the OVAT Act was issued on 23.8.2007 enclosing the Audit Visit Report submitted to the Assessing Authority on 12.12.2006, which is much after expiry of the period of limitation of six months on 11.06.2007. He further contended that if the statute requires to do a thing in a particular manner, the authority is to follow the same. In support of his contention, he relied upon the judgment of this Court dated 25.9.2014 passed in W.P.(C) No. 2971 of 2009 in the case of M/s. Delhi Foot Wear v- Sales Tax Officer and others. It was also submitted that the order of assessment under Annexure-1 is not sustainable in law as the same has been antedated.