TaxTMI 
TaxTMI 
2008 (12) TMI 687
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....lesale basis. Besides the trading business, the petitioner-firm is also running a rice mill under the name "bhagabati rice mill". The said firm is registered with the assessing officer under the Orissa Value Added Tax Act, 2004 (hereinafter referred to as "the OVAT Act") with TIN No. 21901602962. It is also registered under the Central Sales Tax Act, 1956 (hereinafter referred to as, "the CST Act"). A tax audit was conducted in the business premises of the petitioner-firm on February 24, 2008. After completion of audit, a tax audit report was submitted to the assessing authority suggesting to take action under section 42 of the OVAT Act in view of certain suppression detected during the tax audit visit. Again on March 12, 2008, the Vigilance Sales Tax Squad of Berhampur Division headed by the CTO (V) paid a surprise visit to the business premises of the petitioner-firm. In course of inspection, the officers recovered one diary/ notebook containing thirty-six written pages and three other written slips from the business premises of the petitioner-firm. The notings made in three slips and thirty-six written pages of diary could not be cross-verified with regular books of account of t....
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....of the assessing officer is illegal, arbitrary and any assessment order passed without supplying copies of the documents so applied for will be highly prejudicial to the interest of the petitioner. He, however, submits that in the meantime, the assessing officer has supplied the copy of the report submitted by the CTO (V) and the petitioner has already appeared before the assessing officer along with the books of account, but as yet the assessing officer has not supplied the seized documents such as copies of the three slips and thirty-six written pages of the diary. The learned counsel relies on the decisions of this court in Geeta Industries Ltd. v. Commissioner of Commercial Taxes [1996] 100 STC 48 and J.S. Refineries Ltd. v. Commissioner of Sales Tax [1998] 109 STC 16. Per contra, Mr. R.P. Kar, learned counsel appearing on behalf of the Revenue, submits that pursuant to the application of the petitioner made under annexure 1, certified copies of the statements recorded from the managing partner of the petitioner-firm were issued to the petitioner. The purpose of surprise visit to the place of business of the petitioner was to find out whether the petitioner has indulged in clan....
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....order to impose procedural safeguards, this court has read the requirement of natural justice in many situations when the statute is silent on this point. The approach of this court in this regard is that omission to impose the hearing requirement in the statute under which the impugned action is being taken does not exclude hearing-it may be implied from the nature of the power-particularly when the right of a party is affected adversely. The justification for reading such a requirement is that the court merely supplies omission of the Legislature. In Delhi Transport Corporation v. D.T.C. Mazdoor Congress [1991] Supp 1 SCC 600, the honourable Supreme Court held as follows: "...It is now well-settled that the 'audi alteram partem' rule which in essence, enforces the equality clause in article 14 of the Constitution is applicable not only to quasi-judicial orders but to administrative orders affecting prejudicially the party-in-question unless the application of the rule has been expressly excluded by the Act or regulation or rule which is not the case here. Rules of natural justice do not supplant but supplement the Rules and Regulations. Moreover, the rule of law whi....
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....ice would be violated unless such opportunity is given. It is well-settled that principles of natural justice cannot be confined within close jackets. What would be the principle in a particular case would depend on the facts and circumstances of that case. One thing, however, is certain that in an assessment proceeding if any particular material is used against an assessee then the assessee must be given full opportunity to rebut any adverse inference that could be drawn from user of that particular material. This was fully discussed by us in Muralimohan Prabhudayal v. State of Orissa [1970] 26 STC 22 (Orissa) wherein a question arose as to whether the assessee could be given opportunity for cross-examination with reference to account books of third parties used against the assessee. In paragraph 5 of our judgment we referred to the fourth proposition as follows: 'In case he proposes to use against the assessee the result of any private enquiries made by him, he must communicate to the assessee the substance of the information so proposed to be utilized to such extent as to put the assessee in possession of full particulars of the case he is expected to meet and should furt....
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....hase and/or sale, if any, found on such verification. In such event, the assessing officer is not bound to accept the view of the inspecting officer in respect of the allegations raised against the dealer in the report in entirety. He may not accept the report at all. He may accept the report in part. Therefore, the part of the report containing allegation against the dealer and the materials on the basis of which such allegation has been made must have to be disclosed to the dealer for his rebuttal, if the assessing officer wants to utilize the same against the dealer. This court in Kanak Cement Pvt. Ltd. [1997] 105 STC 112 held that mere expression of a view by the inspector without any material to substantiate it cannot be the basis for drawing adverse inference. Thus, after going through the report of the inspecting officer, if the assessing officer prima facie finds that the report contains material(s) which suggests that the dealer is involved in suppression of purchase and/or sale or claims inadmissible exemption, input tax credit, etc., he issues notice to the concerned dealer for production of the books of account for relevant period for verification with r....