BABULAL AGRAWAL Vs. STATE OF ORISSA

JUDGEMENT

(1.) IN this Sales Tax Revision Petition (earlier SJC No. 186 of 1995) this court vide order dated July 14, 1998 directed the Orissa Sales Tax Tribunal (hereinafter called, "the Tribunal") to refer the following question for adjudication :

(2.) THE facts and circumstances giving rise to the present revision petition are that the petitioner during the relevant time was a registered dealer under the Orissa Sales Tax Act, 1947 (hereinafter called, "the OST Act") and carrying on business in fertilizer, kerosene oil, salt, M.S. rod, etc., at Rampur in the district of Bolangir. For the year 1981 -82, the petitioner was assessed under section 12(4) of the OST Act. On receipt of a fraud report No. 6 of 1983 -84 from Vigilance Wing of Sambalpur, the original assessment was reopened by the Sales Tax Officer, Bolangir I Circle, Bolangir (hereinafter called "the assessing officer") under section 12(8) of the OST Act. In response to the said notice, the petitioner appeared before the assessing officer. In course of assessment proceeding, the assessing officer confronted the petitioner to the extract of account of M/s. Radheshyam Satyanarayan of Kantabanji (hereinafter called "M/s. RSK") alleging that the petitioner carried on paddy transaction with said firm as there was mention of "Babulal" in the said seized document and the same was not disclosed to the Department. In reply, the petitioner denied having any such transaction with M/s. RSK. The petitioner further stated before the assessing officer that there were so many "Babulals" in Bolangir district. He demanded confrontation with M/s. RSK from whom books of account were seized wherein "Babulal" had been mentioned. The petitioner further explained to the assessing officer that he did not appear before the vigilance authority in response to notice under section 16(1) of the OST Act as that authority was not the sales tax authority.

(3.) BEING aggrieved, the petitioner filed first appeal before the Assistant Commissioner of Sales Tax, Bolangir Range, Bolangir (hereinafter called "the first appellate authority") challenging the assessment order. Before the first appellate authority, the petitioner denied the allegation of doing paddy business with M/s. RSK and demanded confrontation with said M/s. RSK and Sri Mahajan Sahu. It was further contended that statement of Sri Mahajan Sahu recorded behind the back of the petitioner was never confronted to him before that was utilized in the assessment order. Learned first appellate authority vide order dated September 17, 1986 passed in Appeal No. AA42 (BP I) of 1985 -86 sent back the order of assessment to the assessing officer for fresh assessment after giving an opportunity to the dealer - appellant for confrontation with the alleged seized documents and the firm M/s. RSK and Sri Mahajan Sahu who gave statements regarding alleged business activities of Babulal Agrawal in paddy. Being dissatisfied with the order of the first appellate authority, the Department carried the matter to the Tribunal. The petitioner filed a cross -objection supporting the order of the first appellate authority. The learned Tribunal held that there was no justification for the first appellate authority to direct confrontation with purchasing dealer M/s. RSK and their books of account and Sri Mahajan Sahu, as no such confrontation was ever prayed for by the assessee at the investigation stage before the Vigilance Wing, Sambalpur, which is prior to initiation of proceedings under section 12(8) of the OST Act by the assessing officer.