M/S K.Bhimaraju And Sons vs. State Of Odisha

Held

The Court held that the Petitioner's challenge to the assessment order, even assuming it was without jurisdiction, was not maintainable at this stage. The Court noted that the assessment order had remained unchallenged by the Petitioner. Having failed to avail the statutory remedy of an appeal against the assessment order, the Petitioner could not question it after receiving the Tax Recovery Notice (TRN). Consequently, the Court was not prepared to entertain a challenge to the assessment order or the consequent TRN at this juncture. The Court's reasoning was based on the Petitioner's failure to exhaust the available appellate remedies. The ratio decidendi is that a party cannot bypass the statutory appeal mechanism and challenge an order at the recovery stage, especially when the order has become final due to non-challenge. The Court dismissed the writ petition.

Facts

The Petitioner, M/s. K. Bhimaraju & Sons, challenged a Tax Recovery Notice (TRN) dated September 3, 2021, issued by the Tax Recovery Officer, CT & GST, Gunupur. The TRN was based on an assessment order dated October 24, 2017, passed by the Sales Tax Officer, Assessment Unit, Gunupur. This order raised a demand of Rs. 27,328,028/- for petrol and diesel suppression and Rs. 306,132/- for cloth material suppression, along with a penalty of Rs. 55,268,320/- under Section 43(2) of the OVAT Act. The Petitioner argued the assessment order was without jurisdiction. The Revenue contended that the assessment order was served on November 20, 2017, and the Petitioner did not file an appeal or pay the demand. The Petitioner received the TRN on September 29, 2021. The Revenue also noted the Petitioner obtained a certified copy of the assessment order on January 20, 2020, but took no steps to challenge it.

Key Issues

1. Whether the Petitioner can challenge the assessment order dated October 24, 2017, and the consequent Tax Recovery Notice dated September 3, 2021, on the grounds of lack of jurisdiction, after failing to file an appeal against the assessment order and having received the notice for recovery of tax and penalty. Petitioner's contention: The Petitioner argued that the impugned notice (TRN) was served on September 29, 2021, and that the assessment order was passed without jurisdiction, justifying the present writ petition. The Petitioner's counsel submitted that the assessment order was without jurisdiction. Revenue's contention: The Revenue argued that the assessment order was served on the Petitioner on November 20, 2017. Under Rule 2(3) of Schedule 'E' Part-I of the OVAT Act, the certificate sent to the Tax Recovery Officer (TRO) by the Assessing Authority cannot be questioned by the Assessee, and no objection can be entertained by the TRO. The Revenue also pointed out that the Petitioner obtained a certified copy of the assessment order on January 20, 2020, but took no steps to challenge it, indicating acquiescence.