M/S.Vinayak Agro Industries vs. State Of Odisha

Facts

The Petitioner, M/s. Vinayak Agro Industries, assailed an order dated 30.07.2021 passed by the Additional Commissioner of Sales Tax (Appeal), Sundargarh Range, Rourkela. This order confirmed an assessment order dated 27.01.2016 passed under Section 10 of the Odisha Entry Tax Act, 1999 (OET Act) for the tax periods from 01.04.2008 to 31.03.2014. The Petitioner argued that the assessment was barred by limitation as it was not completed within the stipulated period under Section 10 of the OET Act read with Section 43(4) of the OVAT Act. Furthermore, the Petitioner contended that the assessment was based solely on an investigation by the Central Excise Authority, which was subsequently quashed by the Central Excise, Customs and Service Tax Appellate Tribunal (CESTAT) due to lack of material evidence. The Revenue, represented by the Additional Standing Counsel, pointed out that the Petitioner had previously challenged the same assessment order in W.P.(C) No. 5317 of 2016, which was dismissed as withdrawn with liberty to file an appeal. The Revenue also stated that an independent inquiry by the Vigilance Wing of the CT & GST Organization supported the assessment and that an alternative remedy was available to the Petitioner under Section 17 of the OET Act.

Held

The Court noted that the Petitioner had previously approached the High Court in W.P.(C) No. 5317 of 2016 challenging the same assessment order, which was dismissed as withdrawn with liberty to file an appeal. The Court also observed that the Petitioner had the liberty to file an appeal before the Odisha Sales Tax Tribunal. The Revenue argued that the issues raised, including the question of limitation, could be adjudicated by the Sales Tax Tribunal. The Court, in its discretion, found that since the question of limitation could be gone into by the learned Sales Tax Tribunal while adjudicating the issues raised by way of a second appeal, it was not inclined to entertain the writ petition. At this stage, the Petitioner sought permission to withdraw the writ petition to prefer a second appeal. The Court accordingly dismissed the writ petition as withdrawn with the liberty to the Petitioner to file a second appeal before the Tribunal. The Court directed that the original order in the first appeal be returned to the Petitioner for this purpose. No specific finding was made on the merits of the limitation or the CESTAT quashing order, as the matter was disposed of on the ground of alternative remedy and withdrawal.

Key Issues

1. Whether the assessment order passed under Section 10 of the Odisha Entry Tax Act, 1999, is barred by limitation, considering the provisions of Section 10 of the OET Act read with Section 43(4) of the OVAT Act (as amended with effect from 01.10.2015)? 2. Whether the assessment order, which is based on an investigation by the Central Excise Authority that has been quashed by CESTAT, is sustainable? Petitioner's Arguments: The Petitioner argued that the assessment was time-barred due to the failure to complete it within the statutory period. They further contended that the foundation of the assessment, the Central Excise investigation, was invalidated by CESTAT's order dated 19.01.2021, rendering the assessment unsustainable. The Petitioner relied on the CESTAT order as precedent. Revenue's Arguments: The Revenue argued that the Petitioner had previously challenged the same assessment order in W.P.(C) No. 5317 of 2016, which was dismissed as withdrawn with liberty to file an appeal. They also submitted that an independent inquiry by the Vigilance Wing supported the assessment. Crucially, the Revenue contended that an alternative remedy under Section 17 of the OET Act was available to the Petitioner before the Odisha Sales Tax Tribunal, and therefore, the writ petition should not be entertained.