The High Court ( HC ) of Orissa on a bogus purchase case in the identical name of the assessee held that the assessee has the right to cross-examine the alleged purchaser.
Jai Maa Kali Store, the Petitioner-dealer filed a revision petition against an order dated 8th August 2018 passed by the Odisha Sales Tax Tribunal, Cuttack (Tribunal) dismissing the Petitioner’s appeal. The Tribunal affirmed the order dated 29th April 2003 of the Assistant Commissioner of Sales Tax, Sambalpur Range, Sambalpur dismissing the Assessee’s appeal against an assessment order passed by the Sales Tax Officer (STO) under Section 12 (4) of the Odisha Sales Tax Act, 1947 (OST Act) raising a tax demand and surcharge based on purchase suppression.
The Petitioner-dealer is a wholesaler of grocery articles. The IST, Mobile Unit submitted a fraud case report dated 29th November 2002 on the allegation that the dealer had been involved in the clandestine purchase of edible oil from two parties, one in Raipur (Chattisgarh) and the other from Andhra Pradesh. The three transactions were stated to be of a value of Rs.9,45,440/-.
The Petitioner-dealer denied the above allegation and stated that there was another establishment under the name and style ‘M/s. Jai Maa Kali Store in Bargarh Town’ and that the goods in question may have been purchased by that establishment. The Petitioner made a specific prayer to summon the alleged selling dealers and allow the petitioner to cross-examine them.
The STO rejected this plea on the ground that allowing the request of the Petitioner for cross-examination of selling dealers would ‘prolong and hinder the proceedings’. The JCST and the Tribunal upheld the STO’s approach.
It was evident that the Department relied on material purportedly gathered from the computer records at the border check gates at Chichola and Bhagatdehuri, which indicated the name of the selling dealer.
It was a settled principle that once the dealer has taken a stand that the person shown to be the purchaser is not the Petitioner but someone by the same name, the burden shifted to the Department to demonstrate that in fact, it was the Petitioner who had made those purchases.
Justice M S Raman observed that the matter kept pending in the Tribunal for as long as fifteen years. Today in respect of the transactions that took place way back in February and March 2002, the Petitioner would have to face the prospect of having the STO summon the said selling dealers for their cross-examining.
Further held that there has been a denial of an effective opportunity to the Petitioner-dealer by refusing it the right to cross-examine the selling dealers.
Considering that more than two decades have elapsed since those transactions, an opportunity being provided at this stage to the Petitioner to cross-examine the selling dealers might not even be practical.
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