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2017 DIGILAW 151 (ORI)

Laxmi Jewellers v. State of Orissa

2017-02-07

SANJU PANDA, SUJIT NARAYAN PRASAD

body2017
JUDGMENT : S.N. Prasad, J. This revision has been filed invoking the jurisdiction of this court conferred U/s.80 of the Orissa Value Added Tax Act, 2004 wherein the order dtd.06.03.2013 passed by the Judicial Member of the Orissa Sales Tax Tribunal, Cuttack in SA No.53(V) of 2011-12 is under challenge. 2. The brief facts of the instant review case is that the dealer carries on business in gold and silver ornaments on retail basis having his shop at Aska Town of Ganjam district. He has not been registered under the provisions of Orissa Value Added Tax Act (in short OVAT Act). In response to the notice, the dealer appeared with his books of accounts for verification and the Assessing Officer has confronted him with a new case report being submitted by the Sales Tax Officer (Investigation Unit, Berhampur), as per new case report, a person, namely, Sri Gunjaamali Pattnaik went to the shop of the dealer and purchased two pairs of payal and other articles amounting to Rs.4,980/- but the dealer instead of issuing a retail invoice has given him estimation slip. In order to cross verify the said sale, the investigation team visited the shop of the dealer on 18.3.2008 and on being asked, the dealer told them that he has started his business w.e.f. 11.1.2007 and applied for registration under the provisions of OVAT Act. The dealer also claimed that his daily sale is only Rs.500/- but the investigation team did not accept the same and further held that the dealer has started his business since 01.01.2007. As the dealer has concealing something with regard to investment of his business, they verified the documents and recovered 22 nos. of loose slips and found that the daily average sale of the dealer is more than Rs.45,000/- and they also found physical gold stock and silver stock, hence, the investigation team reported the matter to the local authority that the dealer has started his business w.e.f.01.01.2007 and his daily sale be determined at Rs.45,000/-. of loose slips and found that the daily average sale of the dealer is more than Rs.45,000/- and they also found physical gold stock and silver stock, hence, the investigation team reported the matter to the local authority that the dealer has started his business w.e.f.01.01.2007 and his daily sale be determined at Rs.45,000/-. Being confronted with these allegations, the dealer submitted before the Assessing Officer that his daily sale is not Rs.45,000/-, rather it is only Rs.800/- per day, but the Assessing Officer did not accept the same and determined the daily average sale at Rs.30,000/- w.e.f. 01.01.2007 and determined the GTO and TTO of the dealer and the tax liability came to Rs.1,14,600/ and he levied penalty of the same amount U/s.44(i) of the OVAT Act by raising the demand to Rs.2,29,200/-. Being aggrieved with the enhancement of the demand and fixation of the daily sale at Rs.30,000/-, the dealer preferred first appeal before the Deputy Commissioner, Sales Tax and challenged the same, while challenging, the cash recovered from the cash box amounting to Rs.45,000/- has been said to be his personal money as also he has challenged the determination of his stock available in his shop. The dealer also challenged the imposition of penalty Us.44(i) of the OVAT Act. The Deputy Commissioner, Sales Tax heard the matter and on verification he did not accept the daily sale at the rate of Rs.30,000/- as determined by the Assessing Officer and he limited the same to Rs.10,000/- for the period 11.01.2007 to 31.03.2007 and Rs.15,000/- from 1.4.2007 to 29.02.2008 which came to Rs.53,85,000/- and determined 1% tax on the said value and it came to Rs.53,850/- and he added the penalty U/s.44(i) of the OVAT Act which resulted in reduction of the demand to Rs.1,07,700/-. Being aggrieved with the said order of the first appellate forum, the dealer preferred second appeal contending therein that the average sale fixed by the first appellate forum is illegal and arbitrary and the determination of physical stock available in shop is also not correct. The dealer also challenged the imposition of penalty U/s. 44(i) of the OVAT Act. 3. Being aggrieved with the said order of the first appellate forum, the dealer preferred second appeal contending therein that the average sale fixed by the first appellate forum is illegal and arbitrary and the determination of physical stock available in shop is also not correct. The dealer also challenged the imposition of penalty U/s. 44(i) of the OVAT Act. 3. On the other hand, Revenue has filed cross objection by challenging the order of Deputy Commissioner, Sales Tax on the ground that the reduction of the daily sale from Rs.30,000/- to Rs.10,000/- and Rs.15,000/- for different periods is illegal and arbitrary and the assessment order passed by the Assessing Officer be restored. The Revenue reiterated the same ground as was taken in cross objection filed in the second appeal. The Tribunal, after taking into consideration the rival submission of the parties, had formulated the issue “Whether the findings arrived at by the Deputy Commissioner, Sales Tax in determining the daily sale of the dealer @ Rs.10,000/- for the period from 11.01.2007 to 31.03.2007 and Rs.15,000/- from 01.04.2007 to 29.02.2008 per day and determining the liability U/s.44 of the OVAT Act and imposition of penalty U/s.44(i) of the OVAT Act which resulted in reduction of the amount is justified in the eye of law?” The Tribunal after taking into consideration the factual aspect raised by the parties, both in appeal and cross appeal, has dismissed the same and confirmed the order passed by the Deputy Commissioner, Sales Tax, against which the instant revision application has been filed by the dealer invoking the jurisdiction of this court conferred U/s.80 of the OVAT Act. 4. The dealer – petitioner has taken the following question of law for consideration by this court:- (a) Whether in the facts and circumstances of the case the Tribunal has addressed the issues before it while disposing of the appeal under the OVAT Act? (b) Whether the findings arrived at by the Deputy Commissioner, Sales Tax in determining the daily average sale of the petitioner retain any lawful and valid nexus or the same is based on presumption or surmises? (c) Whether the order passed by the Tribunal is just and proper and is sustainable in the eye of law. 5. (b) Whether the findings arrived at by the Deputy Commissioner, Sales Tax in determining the daily average sale of the petitioner retain any lawful and valid nexus or the same is based on presumption or surmises? (c) Whether the order passed by the Tribunal is just and proper and is sustainable in the eye of law. 5. Learned counsel representing the Revenue has contested the case by vehemently arguing that there is no infirmity in the order passed by the Tribunal and the Tribunal after taking into consideration and appreciation of the factual aspect has passed order confirming the order passed by the Deputy Commissioner, Sales Tax and as such there is no error apparent on the face of the record, rather there is concurrent findings of two appellate forum, hence this court, in exercise of revisional jurisdiction may not interfere. He submits that the scope of revision U/s.80 of the OVAT Act is very limited and it can only be exercised when there is any miscarriage of justice or error in the fact finding, but whatever ground has been taken by the dealer in challenging the order that does not relate to question of law, rather the same is question of fact, since the second appellate forum, on appreciation of the material available on record, has passed a well reasoned order, hence this revision application may be dismissed. 6. We have heard the learned counsels for the parties and perused the documents available on record. The fact which is not in dispute in this case is that an Assessment order was passed U/s.44 of the OVAT Act in respect of the dealer – petitioner, an unregistered dealer for the period from 01.01.2007 to 29.2.2008. The Sales Tax Officer, Investigation Unit, Berhampur submitted a new case report bearing No.28/2007-08 which alleged that the dealer was carrying on business of gold and silver Jewellery and being liable for registration was carrying business without getting registered. The dealer was issued statutory notice and in response to the same, he appeared before the Sales Tax Officer and produced the books of account of his business which indicates that he started his business on 12.1.2007 and his first sale started on 24.1.2007, but however, the dealer had not produced any books of account before the Investigation Unit Officer. The dealer was issued statutory notice and in response to the same, he appeared before the Sales Tax Officer and produced the books of account of his business which indicates that he started his business on 12.1.2007 and his first sale started on 24.1.2007, but however, the dealer had not produced any books of account before the Investigation Unit Officer. The Assessing Officer has decided to the best of his judgment that the daily average sale of the dealer is Rs.30,000/-. The date of start of business has been determined at 01.01.2007, thus the sale of dealer exceeded Rs.3 lakh on 10.01.2007 making the dealer liable for registration on 11.01.2007 and accordingly the sale turn over of the dealer has been determined at Rs.1,14,60,000/- and penalty U/s.44(i) of the OVAT Act as Rs.2,29,200/-. The dealer, being aggrieved with the order passed by the Assessing authority, has challenged the same before the Joint Commissioner of Sales Tax invoking the jurisdiction of the first appellate authority and the first appellate authority, after taking into consideration the rival submissions of the parties, has found as regards cash of Rs.4,980 as has been found by the visiting officer on 20th March, 2008, the dealer had admitted before him that Rs.800/- was the sale proceed till 12.40 P.M. and the balance was sale proceed of the previous day and his own money, hence the daily sale as fixed by the assessing officer at Rs.30,000/- per day is high and excessive. The first appellate authority after taking into consideration the estimation slips of selling of gold and silver in different months, i.e. during the month of 03/2007, 11/2007, 12/2007, 01/2008, 02/2008 and 03/2008 has came to conclusion that the investigating officer has taken the transaction in the estimation slip in a single month and has estimated the credit transaction of Rs.15,000/- which is wrong because the dealer has not effected the transaction recovered in a single month. He further opined that the cash sales estimated by the investigating officer basing upon the credit sale is not accepted because gold and silver are such a goods which cannot be sold through out the year, in marriage season its sale is high and in other season its sale is low. He further opined that the cash sales estimated by the investigating officer basing upon the credit sale is not accepted because gold and silver are such a goods which cannot be sold through out the year, in marriage season its sale is high and in other season its sale is low. So far as physical stock of gold and silver, the first appellate authority has not accepted the plea recorded by the Assessing Officer so far as it relates to the estimation of the investigating officer regarding physical stock of gold ornaments at Rs.10,21,200/- @ Rs.1200/- per gram and silver stock at Rs.2,51,440 @ Rs.20/- per gram, hence extra demand of Rs.1,14,600/- and penalty of Rs.1,14,600/- of the OVAT Act has been found to be illegal and unwarranted, but the first appellate authority has found justifiable reason to differ with the average monthly sale as estimated by the inspecting officer by taking the above quantity of gold and silver and accordingly reduced the amount of penalty imposed by the Assessing Officer. The dealer as well as the Revenue have filed appeal against the order passed by the first appellate authority, the second appellate authority, after hearing the learned counsels for the parties has came to definite finding after going through various aspects of the matter and observed therein that the entire case depends on a new case report submitted by the Investigating unit and the shop of the dealer which was visited by them on 28.3.2007 by one person, namely, Sri Gunjaamali Pattanaik who has purchased goods worth of Rs.4,980/- but the dealer did not grant any retail invoice to the purchaser and as such to verify the matter, investigation wing visited the shop and found that the dealer has indulged in clandestine business and he has not been registered under the provisions of the OVAT Act. The dealer claims that he started his business w.e.f. 11.1.2007 but as his explanation was not satisfactory, the investigation unit determined the date of business w.e.f. 01.01.2002 and also reported the matter to the local authority. The second appellate authority has examined the quantum of the daily sale of the dealer to determine liability as an assessee under the provisions of the OVAT Act. The second appellate authority has examined the quantum of the daily sale of the dealer to determine liability as an assessee under the provisions of the OVAT Act. He further came to finding regarding the best assessment judgment done by the Assessing Officer and deferring with his order and in agreement with the order passed by the first appellate authority, accepting the reasoning that gold and silver ornaments are sold mostly during marriage season and as such the estimation made by the first appellate authority for a particular period at Rs.10,000/- from 11.1.2007 to 31.3.2007 and Rs.15,000/- from 1.4.2007 to 29.2.2008 has been held to be justified which resulted in reduction of demand to Rs.1,07,700/- which also includes penalty U/s.44(i) of the OVAT Act. The second appellate authority has also came to find while answering the ground of the assessee for imposition of penalty U/s.44(i) of the OVAT Act by holding therein that the penalty U/s.44(i) of the OVAT Act is in consonance with the statutory provision since the first appellate authority has added the actual amount of tax as penalty. 7. We after going through the materials available on record and the substantial question formulated by the assessee, are of the considered view that whatever ground has been taken by way of substantial question of law, actually it is not substantial question of law, rather it pertains to factual aspect and the second appellate authority accepting the reasons of the first appellate authority, which is based upon cogent evidence, has found no reason to deviate from it. We, in exercise of power conferred U/s.80 of the OVAT Act, may interfere with the finding of the statutory appellate authority if there is any error apparent on the face of record or miscarriage of justice, but cannot assume the power of appellate court for reversing the fact finding by re-appreciating the evidence or the materials produced before the appellate forum. In view thereof, we are of the considered view that no ground has been made by the petitioner – assessee in the instant revision application to invoke the jurisdiction conferred to this court U/s.80 of the OVAT Act. So far as the ground taken by the assessee that reasonable opportunity has not been provided, but we, after going through the material available on record, are of the considered view that the assessee has been provided adequate opportunity in all the stages. So far as the ground taken by the assessee that reasonable opportunity has not been provided, but we, after going through the material available on record, are of the considered view that the assessee has been provided adequate opportunity in all the stages. In the result we find no reason to interfere with the finding given by the second appellate authority. Accordingly the review application is dismissed.