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

Facts

The Petitioner, M/s. Tex Marketing Agency, challenged an order dated April 5, 2022, passed by the Commissioner of Sales Tax, Odisha, in revision case No. BH-IIAST-223 to 224E of 2017-18. The challenge stemmed from an assessment order dated April 27, 2015, by the Deputy Commissioner of Sales Tax, Bhubaneswar-II Circle, raising a demand of Rs. 39,05,216/- for the period December 1, 2014, to August 31, 2015, under the Odisha Entry Tax Act, 1999. The Petitioner's appeal to the Additional Commissioner of Sales Tax was dismissed on April 28, 2017. Subsequently, a second appeal was filed before the Odisha Sales Tax Tribunal, along with an application under Section 17(7) of the OET Act before the Commissioner of Sales Tax seeking a stay on the demand. The Petitioner was then served a show-cause notice dated April 25, 2022, by the Joint Commissioner of Sales Tax, directing deposit of Rs. 26,72,018/- (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 Annexure-8 series. It found that the Petitioner received short notice for the hearing before the Commissioner of Sales Tax, and its non-appearance was due to the unavailability of its lawyer, which remained uncontroverted. Without delving into the merits of the case, the Court concluded that setting aside the ex parte order dated April 5, 2022, and restoring the revision case to the file would serve the ends of justice. The Court set aside the impugned order and directed the Petitioner 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, passing an appropriate order in accordance with law without being influenced by any observations made in the judgment. The Petitioner was cautioned against seeking unnecessary adjournments. No specific issue was expressly left undecided.

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 application for stay of realization of interest and penalty under Section 17(7) of the Odisha Entry Tax Act, 1999? The Petitioner argued that it was not given a reasonable opportunity to appear before the Commissioner. It contended that prior to the COVID-19 pandemic, hearings were not taken up despite its presence, and during the pandemic, it was prevented from appearing. Specifically, on April 5, 2022, the notice for hearing was received less than 24 hours before the scheduled time, and its lawyer was out of station, preventing appearance. The Petitioner claimed to have deposited the entire tax liability and should have been granted a stay on interest and penalty during the pendency of the second appeal. The Revenue contended that while the tax component was deposited, the interest and penalty remained outstanding, and the Petitioner was liable to discharge this liability, citing the Supreme Court's decision in State of Odisha Vrs. Reliance Industries Ltd.