2015 (11) TMI 1634 - HC - VAT and Sales Tax

High Court remands case, stresses record review, fair hearing, and timely decision.

The High Court allowed the revision petition, remanding the case to the Tribunal for a fresh disposal. The Court emphasized the importance of considering ... Validity of assessment order - Levy of turnover tax - excess stock found - order of assessment was passed without any documentary evidence and without justification for which the same was set aside by allowing the appeal - Held that: - It is true that a proceeding before the first appellate authority is a continuation of the original proceeding, but the order of the first appellate authority shows that he has gone through the materials available on record. Moreover, the observation of the learned second appellate authority that 'L. C. R. is not available' in the case records is clearly surprising. If the L. C. R. was not available though called for it was not proper on the part of learned second appellate authority to proceed with the second appeal. It would have been appropriate for the learned Tribunal to insist upon the production of the L. C. R. and then proceed to dispose of the case on merit after going through the L. C. R. In such circumstances the order of remand is not sustainable. The Sales Tax Tribunal being the apex body on the commercial tax matter and manned with equal number of Judicial Member, one will expect that the procedure of law as prevalent in judicial course is maintained to the extent possible, even if it is a quasi-judicial Tribunal. No appellate court ought to dispose the appeal without going through the L. C. R. So the Tribunal ought not to proceed to dispose without L. C. R. being available before it. So in the instant case we are constrained to observe that disposal of the second appeal without perusing LCR is not only vulnerable, but also affects the rights of the parties. Petition allowed by way of remand. Issues: Challenge to order passed by Odisha Sales Tax Tribunal - Incorrect audit assessment leading to excess stock worth Rs. 3,52,005.28 - Disallowed ITC claimed by the dealer - Appeal before Joint Commissioner of Sales Tax - First appellate authority setting aside assessment order - Second appeal before Tribunal - Remand by single Member of Tribunal - Submissions by petitioner and Revenue - Lack of consideration of lower court records by second appellate authority - Necessity of perusing lower court records by Tribunal - Remand for fresh disposal.Analysis:1. Incorrect Audit Assessment and Disallowed ITC:The petitioner, a footwear dealer registered under the OVAT Act, faced an audit assessment resulting in a finding of excess stock worth Rs. 3,52,005.28. The assessing officer raised the tax turnover accordingly, directing the petitioner to pay the due amount, including tax and penalty. Additionally, the claimed ITC of Rs. 1,11,424 was disallowed. The first appellate authority overturned the assessment, citing lack of stock discrepancy in the audit report and absence of documentary evidence, leading to the order being set aside.2. Appeals and Tribunal Proceedings:Upon the petitioner's appeal, the Tribunal remanded the matter to the assessing officer, critiquing the first appellate authority for not verifying the petitioner's books of account. The petitioner argued against the remand, asserting that the second appellate authority erred in not confirming the first appellate order. The Tribunal's failure to consider the available documents during the second appeal was highlighted by the petitioner, emphasizing the need for a thorough review of the case records.3. Judicial Propriety and Remand Decision:The High Court scrutinized the Tribunal's actions, emphasizing the importance of upholding judicial standards in quasi-judicial proceedings. The Court criticized the Tribunal for proceeding with the appeal without the Lower Court Records (LCR), noting that the absence of LCR compromised the rights of the parties. The Court stressed the necessity for the Tribunal, as the final fact-finding body, to ensure a comprehensive review of all relevant records before making a decision.4. Remand for Fresh Disposal:In light of the Tribunal's failure to consider the LCR and maintain judicial propriety, the High Court opted to remand the matter for fresh disposal. The Court directed the Tribunal to review the case records, hear both parties, and make a decision by a specified date. By setting aside the Tribunal's order and emphasizing the importance of due process, the High Court aimed to ensure a fair and thorough adjudication of the appeal.In conclusion, the High Court allowed the revision petition, remanding the case to the Tribunal for a fresh disposal in accordance with the law, emphasizing the significance of considering all relevant records and maintaining judicial propriety in quasi-judicial proceedings.