M/S.LAXMI JEWELLERS Vs. STATE OF ORISSA

JUDGEMENT

(1.) This revision has been filed invoking the jurisdiction of this court conferred U/s.80 of the Orissa Value Added Tax Act, 2004 wherein the order dtd.06.03.2013 passed by the Judicial Member of the Orissa Sales Tax Tribunal, Cuttack in SA No.53(V) of 2011-12 is under challenge.

(2.) The brief facts of the instant review case is that the dealer carries on business in gold and silver ornaments on retail basis having his shop at Aska Town of Ganjam district. He has not been registered under the provisions of Orissa Value Added Tax Act (in short 'OVAT Act'). In response to the notice, the dealer appeared with his books of accounts for verification and the Assessing Officer has confronted him with a new case report being submitted by the Sales Tax Officer (Investigation Unit, Berhampur), as per new case report, a person, namely, Sri Gunjaamali Pattnaik went to the shop of the dealer and purchased two pairs of payal and other articles amounting to Rs.4,980/- but the dealer instead of issuing a retail invoice has given him estimation slip. In order to cross verify the said sale, the investigation team visited the shop of the dealer on 18.3.2008 and on being asked, the dealer told them that he has started his business w.e.f. 11.1.2007 and applied for registration under the provisions of OVAT Act. The dealer also claimed that his daily sale is only Rs.500/- but the investigation team did not accept the same and further held that the dealer has started his business since 01.01.2007. As the dealer has concealing something with regard to investment of his business, they verified the documents and recovered 22 nos. of loose slips and found that the daily average sale of the dealer is more than Rs.45,000/- and they also found physical gold stock and silver stock, hence, the investigation team reported the matter to the local authority that the dealer has started his business w.e.f.01.01.2007 and his daily sale be determined at Rs.45,000/-. Being confronted with these allegations, the dealer submitted before the Assessing Officer that his daily sale is not Rs.45,000/-, rather it is only Rs.800/- per day, but the Assessing Officer did not accept the same and determined the daily average sale at Rs.30,000/- w.e.f.01.01.2007 and determined the GTO and TTO of the dealer and the tax liability came to Rs.1,14,600/ and he levied penalty of the same amount U/s.44(i) of the OVAT Act by raising the demand to Rs.2,29,200/-. Being aggrieved with the enhancement of the demand and fixation of the daily sale at Rs.30,000/-, the dealer preferred first appeal before the Deputy Commissioner, Sales Tax and challenged the same, while challenging, the cash recovered from the cash box amounting to Rs.45,000/- has been said to be his personal money as also he has challenged the determination of his stock available in his shop. The dealer also challenged the imposition of penalty Us.44(i) of the OVAT Act. The Deputy Commissioner, Sales Tax heard the matter and on verification he did not accept the daily sale at the rate of Rs.30,000/- as determined by the Assessing Officer and he limited the same to Rs.10,000/- for the period 11.01.2007 to 31.03.2007 and Rs.15,000/- from 1.4.2007 to 29.02.2008 which came to Rs.53,85,000/- and determined 1% tax on the said value and it came to Rs.53,850/- and he added the penalty U/s.44(i) of the OVAT Act which resulted in reduction of the demand to Rs.1,07,700/-. Being aggrieved with the said order of the first appellate forum, the dealer preferred second appeal contending therein that the average sale fixed by the first appellate forum is illegal and arbitrary and the determination of physical stock available in shop is also not correct. The dealer also challenged the imposition of penalty U/s.44(i) of the OVAT Act.

(3.) On the other hand, Revenue has filed cross objection by challenging the order of Deputy Commissioner, Sales Tax on the ground that the reduction of the daily sale from Rs.30,000/- to Rs.10,000/- and Rs.15,000/- for different periods is illegal and arbitrary and the assessment order passed by the Assessing Officer be restored. The Revenue reiterated the same ground as was taken in cross objection filed in the second appeal.