M/S.Kanakadhara Mini vs. Commnr.Of Commercia

Facts

The petitioner, M/s. Kanakadhara Mining & Minerals Pvt. Ltd., challenged notices dated January 2, 2014, issued under Rule 15B(1) of the Orissa Entry Tax Rules, 1999, an Audit Visit Report, and a consequential assessment order dated March 21, 2014, passed by the Sales Tax Officer, Barbil. These actions pertained to the Orissa Entry Tax Act for the period April 1, 2007, to March 31, 2008. A key ground for the challenge was that the audit report was submitted more than a week after the Audit Team's visit. The Opposite Parties were the Commissioner of Commercial Taxes, Odisha, Cuttack, and another authority.

Held

The Court held that the issue regarding the delay in submitting the audit report, in the context of assessment under the Odisha Value Added Tax Act (OVAT Act), was covered in favour of the assessee by this Court's order dated March 31, 2022, in W.P.(C) No.16957 of 2009 (M/s. Pal Construction v. The Assessing Authority, Bhubaneswar-I Circle and others). The Court noted that Section 41(4) of the OVAT Act is pari materia with Section 9B(2) of the Orissa Entry Tax Act. Following the precedent set in the Pal Construction case, the Court quashed the impugned notice, the Audit Visit Report, and the consequential assessment order and any demand raised as a result. The ratio decidendi is that a procedural irregularity in the submission of an audit report, when a similar provision exists in related tax laws and has been addressed by the High Court, warrants quashing of the assessment proceedings.

Key Issues

1. Whether the notices dated January 2, 2014, issued under Rule 15B(1) of the Orissa Entry Tax Rules, 1999, the Audit Visit Report, and the consequential assessment order dated March 21, 2014, passed by the Sales Tax Officer, Barbil, under the Orissa Entry Tax Act for the period April 1, 2007, to March 31, 2008, are liable to be quashed on the ground that the audit report was submitted more than a week after the audit visit. Petitioner's contention: The petitioner argued that the audit report was submitted with undue delay after the audit visit, rendering the subsequent proceedings invalid. The petitioner relied on this Court's order in W.P.(C) No.16957 of 2009 (M/s. Pal Construction v. The Assessing Authority, Bhubaneswar-I Circle and others). Revenue's contention: The judgment does not record any specific arguments made by the Opposite Parties (Revenue).