M/S Tex Marketing Agency, Bbsr vs. Commnr. Of Sales Tax, Odisha

Facts

The Petitioner, Tex Marketing Agency, filed a writ petition challenging an order dated April 5, 2022, passed by the Commissioner of Sales Tax, Odisha. This order was in revision case No. BH-IIAST-223 to 224E of 2017-18. The dispute originated from an assessment order dated April 27, 2015, by the Deputy Commissioner of Sales Tax, Bhubaneswar-II Circle, raising a demand of Rs. 43,05,875/- for the period November 1, 2013, to November 30, 2014, under the Odisha Entry Tax Act, 1999. The Petitioner's appeal to the Additional Commissioner of Sales Tax was dismissed, and a second appeal was filed before the Odisha Sales Tax Tribunal. Simultaneously, an application under Section 17(7) of the OET Act was filed before the Commissioner of Sales Tax seeking a stay on the demand. Subsequently, the Petitioner received a show cause notice from the Joint Commissioner of Sales Tax, directing the deposit of Rs. 30,22,807/- (interest and penalty) due to the rejection of the Section 17(7) petition.

Held

The Court held that the Petitioner had been diligently pursuing its matter, as evidenced by the documents in Annexure-8 series. The Court found that the Petitioner was given short notice to appear before the Commissioner of Sales Tax for the hearing concerning the stay application. The Petitioner's non-appearance was attributed to the unavailability of their lawyer, a fact that remained uncontroverted during the hearing of the writ petition. Without delving into the merits of the case, the Court concluded that the ends of justice would be served by setting aside the ex parte order dated April 5, 2022. The Court set aside the impugned order and restored the revision case to the file. The Petitioner was directed to appear before the Commissioner of Sales Tax on May 31, 2022, with a certified copy of the order. The Commissioner was directed to hear the matter on that date or adjourn it as necessary, and pass an appropriate order in accordance with the law, without being influenced by any observations made by the High Court. The Petitioner was cautioned against seeking unnecessary adjournments. The issue of whether the Petitioner was liable to deposit the entire demand including interest and penalty, as argued by the Revenue based on the Reliance Industries Ltd. case, was not decided on merits.

Key Issues

1. Whether the Petitioner was afforded a reasonable and adequate opportunity to represent its case before the Commissioner of Sales Tax, particularly concerning the rejection of its application for stay under Section 17(7) of the Odisha Entry Tax Act, 1999? Petitioner's Arguments: The Petitioner contended that it was not given a reasonable opportunity to be heard. It alleged that prior to the COVID-19 pandemic, hearings were not taken up despite the Petitioner's presence. During the pandemic, the Petitioner was prevented from appearing. On the last occasion, April 5, 2022, the notice was received less than 24 hours before the scheduled hearing, and the Petitioner's lawyer was out of station, preventing their appearance. The Petitioner argued that the Commissioner proceeded ex parte without considering these difficulties. The Petitioner also highlighted its diligence in pursuing the matter on earlier dates (April 27, 2019, June 1, 2019, and August 3, 2019) when the authority did not take up the hearing. Revenue's Arguments: The Revenue submitted that while the tax component of the demand was deposited, the Petitioner had not deposited the interest and penalty. It was also argued that the Petitioner was liable to discharge its entire liability, including interest and penalty, citing paragraph 30 of the judgment in Reliance Industries Ltd. Vrs. State of Odisha, which was varied by the Supreme Court.