Check-post tax collection requires Form VI-B notice, recorded reasons for value departures, and later adjustment in assessment.

Check-post collection under rule 94(4)(a) of the Orissa Sales Tax Rules, 1947 is permissible only when defects or omissions in the way-bill are noticed or evasion appears, and notice in Form VI-B must be served so the dealer can rectify defects or exercise the option to pay the indicated amount. Any departure from the disclosed value must be supported by recorded reasons; the amount cannot be fixed arbitrarily, even though the procedure is an emergency measure and not a full adjudication. Amounts already collected at the check-post must be taken into account and adjusted against the admitted tax liability during assessment.

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Issues: Whether tax could be collected at the check-post without serving notice in Form VI-B under rule 94(4)(a) of the Orissa Sales Tax Rules, 1947, whether the check-post officer could arbitrarily fix the value of the goods for such collection, and whether amounts already collected were liable to be adjusted in assessment.

Analysis: Rule 94(4)(a) contemplates collection at the check-post only where defects or omissions in the way-bill are noticed or where evasion of tax appears, and in such cases notice in Form VI-B must be served to enable rectification or exercise of the option to pay the amount indicated. The amount indicated cannot be fanciful or arbitrary and, where a departure from the disclosed value is considered necessary, reasons must be recorded. Since the procedure is in the nature of an emergency measure, detailed adjudication is not envisaged, but the requirement of fairness and natural justice remains. Amounts already collected were directed to be taken into account at the time of assessment and adjusted against admitted tax liability under the third proviso to rule 36 of the Rules.

Conclusion: Check-post collection without the prescribed notice and without recorded reasons for departure from the way-bill value is impermissible, and the amounts already collected must be adjusted in assessment.

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