Remanded

State v. Surya Udyog Ltd.

Orissa HC16 Nov 2015STREV/78/2003

Case brief

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What is this about?

A sales tax revision petition challenged an order allowing an assessee's appeal despite a prior search and seizure violating Rule 46 of the Orissa Sales Tax Rules. The Court, relying on a Division Bench precedent, held the procedure flawed and remanded the matter.

What did the court decide?

The impugned order dated 15.1.2003 was set aside and remanded to the Sales Tax Tribunal to hear the matter afresh after returning the seized documents to the assessee.

2. This Sales Tax Revision has come to be filed seeking to challenge the order dated 15.1.2003 passed by the Orissa Sales Tax Tribunal, Cuttack in S.A. No.2403 of 1996 -97 and S.A. No.2612 of 1996-97, by which order, the Appeal filed by the opposite party-assess ee (M/s. Surya Udyog Limited) i.e. S.A. No.2403 of 1996-97 came to be allowed and the Appeal f iled by the State of Odisha (petitioner herein) in S.A. No.2612 of 1996-97 came to be rejected by way of majority opinion.

3. Although various contentions were raised by the learned counsel for th e respective parties, the main contention raised on behalf of the State is that, while there i s no dispute that Rule 46 of the Orissa Sales Tax Rules had not been complied with by the Asse ssing Officer, in other words, neither approvals have been obtained from the superior authorit ies for extended period of retention of documents seized in course of search nor was the docum ents ever handed back to the assessee, yet no prejudice has been caused to the assessee since, in course of assessment, the documents seized were confronted to the representative of the as sessee and the assessee had sought to explain this transaction which were found from the seize d documents.

4. Mr.Paikray, learned counsel appearing for the assessee-opposite party contends that once the State have admitted non-compliance of Rule-46 of the Orissa Sales Tax R ules, consequently, the order emanated from a search and seizure and the proceeding initiated thereafter violating the Rule-46 itself, is non-est in the eyes of law.

In this respect, Mr.Paikray, learned counsel for the opposite party-as sessee places reliance on the judgment dated 07.09.1976 rendered by the Division Bench of the High Court of Calcutta in the case of State of West Bengal and others Vs. Sarda and Sons passe d in A.O.D. No.997 of 1973 as well as the decision of the Honble Supreme Court in the case of Commissioner of Income Tax Vs. Jawahar Lal Rastogi, 1970 (2) SCC 225 and submits that, admitte dly in course of assessment, the assessee had sought for return of the documents and the said petition had been rejected by the Assessing Officer. Therefore, the assessment and thereafter the demand thereto, stand vitiated in view of the violation of Rule 46 of the Orissa Sales Tax Rules.

5. Mr.Kar, learned Standing Counsel for the Revenue (petitioner), on the other hand, submits that the Division Bench of this Court had dealt with the issue of violatio n of Rule-46 of the Orissa Sales Tax Rules in the case of Super Construction Vs. Asst. Commiss ioner, Sales Tax and another, (2008) 18 VST 387 (Orissa). In this judgment, this Court had tak en into consideration both the citations referred to by Mr.Paikray and in conclusion of the sa me directed the Sales Tax authorities to retain copies of the seized documents and/or books of accounts and, thereafter, return the seized books of accounts to the assessee within a period of 30 days from the date of the said order.

6. Learned counsel for the opposite party-assessee submits that although the judgment of this Court was passed in the case where the assessee had sought to challenge t he refusal to return the documents seized from an assessee, the said judgment in the facts of the case is distinguishable, inasmuch as, in the present case, the search and seizure has been followed by an assessment and thereafter, the demand which is the subject matter of challenge

7. Having heard the learned counsel for the respective parties, we are of the considered view that the Tribunal ought to have considered this aspect vis--vis the appli cability of Rule 46 of the Orissa Sales Tax Rules and the consequences of violation of Rule 46 vis--vis the proceeding initiated against the assessee. We are of the further view that this Court is bound by the earlier judgment rendered by the Division Bench of this Court in the cas e of Super Construction (supra) in which, the citation relied upon by the Opposite Party-asses see has been referred to and discussed. Consequently, we direct as follows: (i) The order dated 15.1.2003 passed by the Orissa Sales Tax Tribunal, Cuttack in S.A. No. 2403 of 1996-97 is set aside and the matter is remanded to the Sales Tax Tribunal to hear the matter afresh.

(ii) The Opposite Partyassessee shall file an application before the Assessing Officer seeking return of the documents seized in course of search and seizure and the Assessing Officer shal l do well to return the documents forthwith preferably, within a period of two weeks from the date of filing of such application by retaining copies thereof for the purpose of the proceedi ng before the Tribunal.

(iv) It is made clear that nothing stated herein shall affect the merits of the case and the T ribunal shall do well to consider the matter afresh after the documents are returned to the as sessee and dispose of the same within a period of three months from the date of first appearan ce of the parties.

8. With the aforesaid observations and directions, the Sales Tax Revision is disposed of. 9. Free copy of this order be handed over to the learned counsel for the Revenue. Urgent certified copy of this order be granted on proper application.

State v. Surya Udyog Ltd.

Case brief

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State v. Surya Udyog Ltd.

Case brief

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