TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 971
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Orissa Sales Tax Tribunal, Cuttack (shortly as 'the Tribunal') for having enhanced the tax demand on the grounds inter alia that the same is beyond jurisdiction and not based on material facts on record and thus, liable to be set aside. 2. Taking into account the issues involved, the following questions of law are hereby taken up for consideration, namely, (a) Whether, in the facts and circumstances of the case, the order of the Tribunal enhancing the assessment without taking recourse to Rule 50(3) of the Orissa Sales Tax Rules, 1947 (in short 'the Rules') is sustainable in law? (b) Whether enhancement of turnover in absence of any materials to establish that the goods found short have been sold is justified in view of the ratio dec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Annexure-3. 4. According to the Petitioner, the reports submitted by the Vigilance Unit, Sambalpur alleged shortage of 18.85 Quintals of paddy and 0.51 Quintals of rice which was explained away before the authorities for being on account of driage which is within the permissible limit and in respect of the other report on purchase suppression of 1899.15 Quintals of paddy and sales suppression of 4.88 Quintals of rice besides 01 Quintal of broken rice, the same was clarified by stating that the discrepancies have been due to improper stock taken on sampling basis by the inspecting officers and also on account of driage but then, the STO without accepting the above explanation, estimated suppression at Rs.9,00,204.75 and suppressed sales t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e bags ranged from 62- 75 Kg, as earlier the Vigilance Wing had taken the stock @ 64 Kg per bag but it has been erroneously pegged at 75 Kg each bag at the time of inspection and subsequently stood accepted by the authority concerned. Mr. Sahoo contends that the allegation of excess stock giving rise to the claim of purchase suppression is not valid and lawful for which the impugned enhancement of turnover by the Tribunal is manifestly illegal and arbitrary. It is submitted that the enhancement was directed by the Tribunal without due notice which is required as per Rule 50(3) of the Rules, and while claiming so, an order dated 12th March, 2008 of this Court in STREV No.245 of 2007 decided in M/s Utkal Sales Corporation v. State of Orissa a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ears that the enhancement was directed not in compliance of Rule 50(3) of the Rules and therefore, in the considered view of the Court, the basic principle of natural justice and the relevant provision in the OST Rules have not been followed. In a similar situation, the enhanced assessment directed by the Tribunal was interfered with in the case of M/s Utkal Sales Corporation and the matter was remanded for a fresh consideration in accordance with law. 8. As to the other grounds raised by the Petitioner that notice was not issued in terms of Rule 57 of the OST Rules, it is contended that the same was not complied while disposing of the appeal and hence, the enhancement is not tenable in law in view Section 23(3)(b) of the OST Act read with....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k is shown, the enhancement of taxable turnover cannot be sustained unless it is further proved that the stocks were sold by the assessee, which is the view expressed by this Court in Laxminarayan Sawalram (supra) and the same was reiterated in STREV No.2 of 2008 in the case of M/s Gupta Distributors, Cuttack v. State of Orissa decided on 22nd March, 2022. When there has been an observation by the ACST that the Vigilance Wing previously had taken the stock on sample weighment @ 64 Kg per bag, in the opinion of the Court, to rely upon the report of the inspecting officers tagging each bag @ 75 Kg and that too measured on eye-estimation would not be proper, which is also claimed not to have been confronted to the Petitioner. Such eye-estimati....