TaxTMI 
TaxTMI 
2023 (3) TMI 1331
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....concern nor sold the HSD (High Speed Diesel) or LDO (Light Diesel Oil) as its finished products; manufactured out of any raw materials and consumables, as it has paid entry tax on procurement of HSD and LDO into the State of Odisha, but has not sold any finished goods rather sold the same goods as procured and, thereby, the claim of the petitioner for setting off of the entry tax paid is not admissible. 2. The factual matrix of the case, in brief, is that the petitioner-company, being a registered dealer under the Orissa Sales Tax Act, 1947 ("OST Act, 1947" for short) having Registration Certificate No.CU-IE-683 within the jurisdiction of Sales Tax Officer, Cuttack-I East Circle, Cuttack, was engaged in the business of refining and selling of petroleum products like Motor Spirit (Petrol), HSD, LDO, Superior Kerosene Oil, Furnace Oil, Bitumen, ATF and AV Gas etc. It sold a part of its stock of HSD to the dealers, who had given undertaking in Form-IV in terms of Item No.81 of Schedule/Rate Chart that they would use the HSD in manufacture, processing of goods for sale or in mining or in the generation or distribution of electricity at a concessional rate of tax @ 4% and a part of i....
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....id on goods which were sold to the dealers for use in manufacturing, processing or mining activities against declaration in Form-IV and determined the tax payable at Rs.1,31,81,725/-. 2.4 Against the said reassessment order dated 27.01.2007 passed by opposite party no.2, the petitioner preferred First Appeal Case No.AA-442/CUIE/2006- 2007 under Section 23(1) of the OST Act, 1947 before the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack. The First Appellate Authority, vide order dated 11.12.2008, dismissed the said appeal and confirmed the reassessment order dated 27.01.2007. 2.5 Aggrieved by the order dated 11.12.2008 passed by the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack, the petitioner preferred Second Appeal No.663/2008-09 before the Odisha Sales Tax Tribunal (Full Bench), Cuttack, along with a stay revision petition before the Commissioner of Sales Tax, Orissa, Cuttack praying for full stay of the demanded amount till disposal of the second appeal. The Tribunal, vide order dated 28.11.2013, confirmed the order passed by the Assistant Commissioner of Sales Tax, Cuttack I Range, Cuttack in the First Appeal for the Assessment Year 2002-200....
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....em No.101 of the schedule of the said notification under Annexure-1 reads as follows:- 101 Light Diesel Oil and High Speed Diesel Twenty per cent 5. Note-1 and Note-2 appended to the said notification read as follows: "Note-1. a. The amount of tax payable and respect of good specified in Sl. Nos.1, 11, 12, 13, 14, 17, 28, 30, 56, 58, 65, 68, 69, 76, 87, 97, 107, 119, 127, 134, 136, 138, 156, 180, 181 and 183 shall be reduced by the amount of Orissa Sales Tax paid by him on raw material and consumables subject to tax on purchase turnover and/or tax collected from him by the selling dealer separately on the body of the bill in respect of sale of raw materials and consumable subject to tax on sale turnover directly used in manufacture of such goods. Explanation:-Building materials for construction of Factories and allied construction, Office equipments, Packing materials, vehicle and such other materials which are not directly used in manufacturer shall not be treated as raw material or consumable for the purpose of allowing set of. b. The amount of tax payable in respect of goods specified in part -III of the Schedule to the Orissa Entr....
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....hus the summed up: 1) when a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order; (2) when a question of law is raised before a tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with it, and is therefore, one arising out of its order; 3) when a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order; 4) When a question of law is neither raised before the Tribunal nor considered by it, it will not be a question arising out of its order notwithstanding that it may arise on the findings given by it." In the case of 'revision', the revisional authority has no power to reassess and re-appreciate the evidence unless the statute expressly confers on it that power. 7. There is no dispute that the petitioner-company is engaged in sale of petroleum products such as MS, HSD, SKO, Lubricants, Furnace Oil, LDO, Bitumen etc. In addition, it also effects purchase of petrol, diesel and SKO from other marketing companies like Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation. It ....
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....ssment should be on the basis of "any reasons". 9. Perusal of Assessment Order dated 31.01.2006 passed under Section 12(4) of the OST Act reveals that the Assessing Officer had allowed set off of entry tax against the sales tax payable on the turnover of sales subjected to tax at concessional rate of tax as per Entry 81 on the strength of declaration in Form IV. For better appreciation the following is extracted from said Assessment Order:- "*** Out of the taxable turnover of Rs.1,31,81,72,472/- (sale against Form IV) is taxed @ 4%, Rs.1,07,65,00,465.00 (sale of SKO, FO, etc.) is taxed @ 4%, Rs.13,01,66,451/- (Bitumen) is taxed @ 8%, Rs.24,59,30,963.00 (sale of lubricants and wax) is taxed @ 12% and Rs.6,89,22,68,475 is taxed @ 20%. ***" In the re-assessment Order dated 27.01.2007 passed under Section 12(8) of the OST Act it has been determined as follows: "*** Accordingly the gross turnover at Rs.13,79,11,93,546.00. After allowing deduction of Rs.1,90,17,42,027.00 towards OSTC/SCC the taxable turnover of the dealer is determined at Rs.9,66,30,38,826.00. OST @ 4% (Form IV on Rs.1,31,81,72,472.00, @ 4% on Rs.1,07,65,00,465.00, @ 8% on 13,01,66,451.00, @ 12% o....
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.... SCC 558). If a conscious application of mind is made to the relevant facts and material available or existing at the relevant point of time while making the assessment and again a different or divergent view is reached, it would tantamount to "change of opinion". If an Assessing Authority forms an opinion during the original assessment proceedings on the basis of material facts and subsequently finds it to be erroneous; it is not a valid reason under the law for re-assessment. Thus, reason to believe cannot be said to be the subjective satisfaction of the assessing Authority but means an objective view on the disclosed information in the particular case and must be based on firm and concrete facts that some income has escaped assessment. 30. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the "change of opinion" and the material present before the assessing Authority. Discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to reinitiate proceedings under Section 21(1) of the Act on the basis of change in subjective opinion (CIT v. Dinesh Chandra H....
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.... been held as follows:- "13. In the present case, the reasons for reopening the assessment do not point to any new material that was available with the Department. What appears to have happened is that the same material viz., the accounts produced by the Assessee were re-examined and a fresh opinion was arrived at by the Opposite Party No.1 regarding the claim of the deduction of Rs.48,183/- on account of the loss of sale of assets. This had already been disclosed in the detailed accounts filed by the Assessee. In fact, a questionnaire had been issued by the AO in the course of the original assessment proceedings to the Assessee which was responded to by the Assessee. In other words, there was conscious application of mind by the AO to the said materials. Therefore, the inevitable conclusion as far as the present case is concerned is that the 'reason to believe' of Opposite Party No.1 that income for the AY in question had escaped assessment is based on a mere 'change of opinion'. 14. In this context, the following observations of the Delhi High Court in Jindal Photo Films Ltd. v. the Deputy Commissioner ofIncome Tax (1998) 234 ITR 170 (Del) are relevant: ....
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.... to be examined in the re-assessment proceedings." 14. The expression "change of opinion" has been explained by this Court in the case of Bharat Petroleum Corporation Ltd. Vrs. Sales Tax Officer, (2012) 52 VST 137 (Ori), wherein it has been laid down as follows: "17. Before proceeding further, it is necessary to know what is the meaning of making assessment on 'change of opinion' under direct or indirect tax. It means, in respect of a particular income/transaction if the Assessing Officer after application of mind, takes a view that the particular goods or income is not liable to tax and completed the assessment, reopening of said assessment is not permissible by mere change of opinion of the Assessing Officer to levy tax on such goods or income. 18. The Hon'ble Supreme Court in the case of Binani Industries Ltd. vs. Asst. Commissioner of Commercial Taxes, [2007] 6 VST 783 (SC), held that reopening of assessment is not permissible by mere change of opinion of the Assessing Officer. Merely because the Assessing Officer changes his opinion that cannot have any effect on the assessment which has been completed on the basis of the view taken on turnover considered ....
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....apex Court in Kelvinator of India Limited (supra) followed by Nava Bharat Ferro Alloys v. State of Orissa, (2010) 31 VST 319 (Ori.). Therefore, the formation of opinion in the reassessment under Section 12(8) of the OST Act cannot have any justification and while forming such opinion, as it appears from the records, no opportunity of hearing to the petitioner was given in compliance of the principles of natural justice. 18. It is also not in dispute that the petitioner-company has paid entry tax on procurement of HSD and LDO into the State of Orissa but has not sold any finished goods rather sold the same goods as procured. On perusal of the assessment order under Section 12(4) of the OST Act, it is made clear that the Assessing Authority has taken note of the fact that HSD and LDO, which have been utilized by different companies by furnishing the Form-IV, the same has been taken note of and assessment thereon has been made by the Assessing Authority. The goods in question have been sold by the petitioner against declaration in Form-IV furnished by the purchasing manufacturers; however, the concessional rate of tax is not available in respect of such goods, namely, HSD & LDO as ....