The Orissa High Court held that the Re-opening of the Assessment merely on the objection of AG without framing Independent Opinion is not Valid.
M/s. R.K. Industries, the petitioner filed the revision petition against the order dated 26th February 2021 passed by the Orissa Sales Tax Tribunal, Cuttack in dismissing the dealer’s appeal for the period 1st April 2012 to 31st March 2014.
The dealer is engaged in the manufacturing of ground nut oil and de-oiled cake using raw groundnuts. The original assessment was completed under Section 42(4) of the OVAT Act for the aforementioned period raising a demand of Rs.2120.00 towards tax and penalty. The Assessing Officer (AO) did not calculate any VAT on the sale of de-oiled cake because it was exempted from VAT.
Based on the report of the AG (Audit) on short levy of purchase tax, the Addl. Sales Tax Officer initiated proceedings in Form VAT 307 and completed the assessment raising a demand and penalty totalling Rs.2,35,352.00. The JCST allowed the appeal filed by the dealer against the above assessment order.
It was noticed that the A.O. has not recorded any reason for initiation of the proceeding for re-assessment either in the order sheet or in the notice issued in Form VAT-307. The A.O. has simply accepted the objection of AG (Audit) and issued a notice in Form VAT-307.
The JCST viewed that the reopening of the assessment was done by the AO by simply accepting the objection of the AG (Audit) without forming an independent opinion on whether such objection by the AG (Audit) was correct or not.
A bench comprising Chief Justice M S Raman observed that AO mechanically opened the assessment to the objection of the audit party. While allowing the petition, the Court set aside the order of the Tribunal as well as the JCST.
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