The Orissa High Court (HC) held that theSuo Motu Revision Power under the Orissa Value Added Tax Act, 2004 OVAT Act can’t be transferred without prior approval of Government.
M/s.Maharana Supply and Co.,the petitioner challenged an order dated 8th March 2019 passed by the Commissioner of Sales Tax, Odisha (CST) whereby the appeal filed by the present Petitioner-Assessee under Section 79 (7) of the Orissa Value Added Tax Act, 2004 (OVAT Act) against the suo-motu revision order dated 12th July 2018 passed by the Addl. Commissioner of Sales Tax (Addl.CST), Cuttack-II Range, Cuttack under Section 79(1) of the OVAT Act raising demand of Rs.7,99,848.
The Petitioner is a dealer registered under the OVAT Act and deals in the sale of sized wood, logs and waste of woodcuts. Under a tax audit conducted under Section 41 of the OVAT Act, theAssessing Authority (AA) passed an assessment order under Section 42 of the OVAT Act by allowing certain deductions while computing the tax liability.
The Joint Commissioner of Sales Tax by exercising suo motu revision power passed an order under Section 79(1) of the OVAT Act.By an order dated 6th December 2018 the CST rejected the application for deciding the preliminary issue. The Petitioner filed Writ Petition before the Court.
Under the above order, the Petitioner filed a petition before the CST seeking deferment of the proceedings. It was stated that on 8th March 2018 adjournment was sought by the counsel for the Petitioner on the ground of ill health. The petitioner had raised three contentions on the issue of jurisdiction.
It was contended that as per terms of Section 5 of the OVAT Act read with Rule 5(2) of the OVAT Rules for delegation of the powers of the CST to the Addl. CST, which was done by the notification dated 5th June 2018, the mandatory prior approval of the Government was not obtained andthe said notification itself had not been gazetted.
Further submitted that since the original assessment order under Section 42 of the OVAT Act was passed by the Sales Tax Officer (STO) as an AA, the revisional power could not have been exercised by the Addl. CST.
Chief Justice M S Raman observed that at the time when the suo motu revisional order was passed, the notification of delegation had not yet been published and, therefore, the Addl. CST who passed a suo motu revisional power was still acting as a JCST.
The Court held that the suo motu revisional power passed by the Addl. CST on 6th December 2018 was entirely without jurisdiction and beyond the powers of the Addl. and the impugned order of the CST was set aside.
While allowing the Writ Petition, the Court quashed the consequential demand raised by the AA.Mr R.P. Kar appeared for the Petitioner and Mr S.K. Pradhan appeared for the Department.
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