M/S.Seetal Automobiles vs. The Commissioner Of Commercial Taxes, Odisha

Facts

The petitioner, M/s. Seetal Automobiles, challenged an order dated February 20, 2017, passed by the Deputy Commissioner of Sales Tax, Bhubaneswar II Circle, and a corresponding demand notice for the period 1999-2000. This order recomputed the surcharge payable by the petitioner. An original assessment order dated March 31, 2001, had computed the surcharge at Rs. 1,00,244.82 after setting off entry tax, and a refund of Rs. 5,66,135.39 was paid. The original assessment order had attained finality. The impugned re-computation order was issued approximately fifteen years after the original assessment. The High Court had previously stayed the operation of the impugned order and notice upon issuing notice in the writ petition.

Held

The Court held that the impugned order of re-computation of surcharge and the consequent demand notice dated February 20, 2017, were liable to be quashed. The Court reasoned that the re-computation was made after an inordinate delay of approximately fifteen years from the date of the original assessment order dated March 31, 2001, which had attained finality. The Court referred to its own previous decisions in identical circumstances, particularly in W.P.(C) No. 14486 of 2021 (M/s. Neelam Motors v. Deputy Commissioner of Sales Tax, Sambalpur-II Circle) and W.P. (C) No. 3609 of 2017 (M/s. JMG Automobiles v. Sales tax Officer, Cuttack), wherein similar re-computation orders were quashed. The ratio decidendi is that such delayed re-assessments, without any justification or challenge to the finality of the original order, are unsustainable. The Court explicitly quashed the impugned re-computation order and the consequent demand.

Key Issues

1. Whether the Deputy Commissioner of Sales Tax had the authority to pass an order re-computing the surcharge approximately fifteen years after the original assessment order, which had attained finality, for the period 1999-2000? Petitioner's Contention: The petitioner argued that the impugned order of re-computation was passed after an inordinate delay of fifteen years, and the original assessment order had attained finality. They relied on previous judgments of this Court in identical circumstances, specifically citing W.P.(C) No. 14486 of 2021 (M/s. Neelam Motors v. Deputy Commissioner of Sales Tax, Sambalpur-II Circle) and an order passed on the same day in W.P. (C) No. 3609 of 2017 (M/s. JMG Automobiles v. Sales tax Officer, Cuttack), which quashed similar re-computation orders when the department had not challenged the original orders before the Supreme Court. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or the Opposite Parties.