JUDGMENT : Biswajit Mohanty, J. An assessee has filed this writ application with prayers to quash the assessment order dated 19.3.2014 (Annexure-1) passed under Section 43 of the Odisha Value Added Tax Act, 2004 and the demand notice under Annexure-2 both passed by the Deputy Commissioner of Sales Tax, (Opposite Party No.1). The assessee has also prayed for a direction to the Assessing Officer to re-compute/reassess the turnover and tax after accepting the revised returns and allowing the petitioner all his rights to file returns revising the turnover as permitted under law. In the alternative, it has prayed for a direction to waive the precondition of payment of 20% of the disputed tax and interest in the event a direction is given for filing of the appeal under the Odisha Value Added Tax Act, 2004, for short “the OVAT Act”. 2. According to the petitioner it operates a sole Proprietorship business and deals in Gold Bullion and Ornaments. Most of its purchases are made from the Punjab National Bank, for short, “the Bank”. The petitioner-assessee purchases Gold Bullion under a rate cutting contract and “the Bank” in turn purchases Bullion from the foreign dealers. As per the Bullion agreement with “the Bank” under Annexure-3, the petitioner places order for Bullion with “the Bank” in the form of an indent and “the Bank” negotiates with the foreign Bullion dealers for the consignment. On receiving the same, “the Bank” informs the petitioner to take delivery of it. When the petitioner takes delivery of stock, a delivery challan is issued at the rate of gold price prevailing on that day. But according to the petitioner, the same is not final sale price. Since the transaction of purchase of Gold bullion by “the Bank” from the foreign Bullion dealers are in terms of international rates of Bullion and foreign exchange rates, both of which keep fluctuating; as per terms of business with “the Bank”, “the Bank” allows a grace period of 11 days to the petitioner for choosing the price as per the lowest Bullion rate in the international markets at London/New York and also gives the assessee a choice for choosing prevailing rate of foreign exchange. “The Bank” permits the petitioner to fix the price as per its choice when the rates are the lowest which is termed as “Rate Cutting”. “The Bank” permits the petitioner to fix the price as per its choice when the rates are the lowest which is termed as “Rate Cutting”. When the petitioner communicates to “the Bank” about the finalization of the rate on a particular day during the grace period, “the Bank” concludes the sale on its part and raises the Invoice, which may be days after the transaction and receipt of the stock by the petitioner. For accounting purposes, the petitioner accounts for the purchase as soon as it receives the Bullion from “the Bank” along with the delivery challan and records it at the price shown in the challan, which is as per the rate prevailing on that day and also computes the tax and accounts for it. Accordingly, it files monthly VAT returns. When finally the sale price is fixed as indicated earlier and on receiving the tax invoice from “the Bank”, which are often issued after 15 days; the petitioner files the revised returns to adjust the actual sale price of the goods and tax thereon. Further, according to the petitioner the opposite parties conducted the tax audit under Section 41 of “the OVAT Act” for the period 1.4.2007 to 31.10.2012. In its Audit Visit Report under Annexure-4, the method of fixing the sale price and the rate cutting have been reflected. According to the petitioner on the basis of the above noted Audit Visit Report, audit assessment was completed under Section 42 of “the OVAT Act” for the period 1.4.2007 to 30.11.2012 and accordingly, the assessment order under Annexure-5 was issued on 18.5.2013. Subsequently, in the very next month the opposite party no.1 vide letter no.5476/CT dated 6.6.2013 informed the Joint Commissioner of Commercial Taxes, Bhubaneswar Range, Bhubaneswar that discrepancies have been detected in the VAT return filed for the period 1.4.2013 to 30.4.2013 by the petitioner, which necessitated further investigation. Accordingly, the opposite party no.1 informed the Joint Commissioner of Commercial Taxes that the matter has been discussed with DCCT Enforcement, Bhubaneswar for detailed enquiry and for submission of enquiry report. Accordingly, the report dated 29.6.2013 under Annexure-6 was prepared, which fallaciously showed that return filed by the assessee claiming input tax credit continuously resulted in eating away the output tax actually generated thereby defaulting in payment of output tax by claiming erroneous input tax credit. Accordingly, the report dated 29.6.2013 under Annexure-6 was prepared, which fallaciously showed that return filed by the assessee claiming input tax credit continuously resulted in eating away the output tax actually generated thereby defaulting in payment of output tax by claiming erroneous input tax credit. Hence, the Sales Tax Officer, Enforcement Range, Bhubaneswar recommended for initiation of action under Section 43 of “the OVAT Act” under Annexure-6. According to the petitioner, basing on the report under Annexure-6, the Assessing Officer passed the impugned order of Assessment under Section 43 of “the OVAT Act” as per Annexure-1 on the ground that the petitioner-assessee is continuously claiming excess input tax credit than what was actually admissible. Consequently, the impugned demand notice under Annexure-2 has been issued. 3. Heard Mr. Dalei, learned counsel for the petitioner and Mr. Debadutta Beura, learned Standing Counsel for Commercial Taxes. 4. Mr. Dalei, learned counsel for the petitioner submitted that the entire decision making process resulting in passing of assessment order under Annexure-1 and consequential demand notice under Annexure-2 has been vitiated as the Officer/Deputy Commissioner of Commercial Taxes, Bhubaneswar-II Circle, Bhubaneswar, who vide letter no.5476 dated 6.6.2013 addressed to the Joint Commissioner of Commercial Taxes, Bhubaneswar Range, Bhubaneswar with copy endorsed to Deputy Commissioner of Commercial Taxes, Enforcement Range, Bhubaneswar highlighted about the discrepancies detected on verification of VAT returns filed for the period 1.4.2013 to 30.4.2013 filed by the petitioner as well as Punjab National Bank and who accordingly recommended further investigation; has himself passed the assessment order under Section 43 of the OVAT Act under Annexure-1. Thus, according to Mr. Dalei, the opposite party no.1 has become a judge in his own cause. In other words, he pointed out that since at his instance enquiry for the investigation was initiated after he detected the so-called huge mismatch and excess claim of ITC by the petitioner, therefore, the said opposite party no.1 ought not to have acted as an Assessing Officer while passing the order under Section 43 of “the OVAT Act” under Annexure-1. He strenuously submitted the officer recommending further investigation and the officer passing the assessment order under Annexure-1 are one and the same. In such background, he prayed that since the impugned assessment order under Annexure-1 has been issued in violation of the principles of natural justice, the same is liable to be quashed along with consequential demand notice under Annexure-2. He strenuously submitted the officer recommending further investigation and the officer passing the assessment order under Annexure-1 are one and the same. In such background, he prayed that since the impugned assessment order under Annexure-1 has been issued in violation of the principles of natural justice, the same is liable to be quashed along with consequential demand notice under Annexure-2. In this connection, he relied upon a decision of this Court as rendered in ABB India Limited – v-State of Odisha and Others as reported in (2015) 77 VST 124 (Orissa). 5. Mr. Debadutta Beura, learned Standing Counsel for commercial Taxes defended the impugned order of assessment and submitted that the said order under Annexure-1 did not suffer from any illegality or infirmity. However, upon instruction he fairly submitted that the officer, who has issued letter no.5476 dated 6.6.2013 to the Joint Commissioner of Commercial Taxes, Bhubaneswar Range, Bhubaneswar highlighting the discrepancy in the VAT returns filed for the period 1.4.2013 to 30.4.2013 and huge mismatch and excess of claim of ITC recommending further investigation, has acted as an Assessment Officer under Section 43 of “the OVAT Act” resulting in issuance of Assessment Order under Annexure-1. He further submitted that the said officer has been transferred from the said post and a different Assessing Officer is presently posted. 6. Having heard the parties, the sole issue that falls for our consideration is whether the opposite party no.2, who on finding discrepancies in the VAT returns had recommended further investigation and wanted submission of detailed enquiry report/evasion report, was competent to assess the petitioner under Section 43 of “the OVAT Act”? As per direction of this Court, Mr. Beura, learned Standing Counsel produced the relevant records including the letter dated 6.6.2013 referred to above. 7. In order to appreciate the issue in a proper manner, we think it appropriate to extract the letter dated 6.6.2013 written by opposite party no.2 to the Joint Commissioner of Commercial Taxes in full as hereunder:- “OFFICE OF THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, BHUBANESWAR II CIRCLE, BHUBANESWAR. No._________________CT., Date__________________ To The Joint Commissioner of Commercial Taxes, Bhubaneswar Range, Bhubaneswar. Sub: Discrepancies detected on verification of Column No.57 of M/s. Subash & Company, Bhubaneswar, TIN-21191106567 and M/s. Punjab National Bank, Bhubaneswar, TIN-21301117904, in the VAT return filed for the period 01.04.2013 to 30.04.2013, both the dealers registered in Bhubaneswar II Circle, Bhubaneswar. No._________________CT., Date__________________ To The Joint Commissioner of Commercial Taxes, Bhubaneswar Range, Bhubaneswar. Sub: Discrepancies detected on verification of Column No.57 of M/s. Subash & Company, Bhubaneswar, TIN-21191106567 and M/s. Punjab National Bank, Bhubaneswar, TIN-21301117904, in the VAT return filed for the period 01.04.2013 to 30.04.2013, both the dealers registered in Bhubaneswar II Circle, Bhubaneswar. Sir, In inviting a reference to the subject stated above, I am to say that M/s. Subash & Company, TIN-21191106567 is a registered dealer under Bhubaneswar II Circle engaged in trading of Gold Bullion and God Ornaments. On verification of Column 57 of VAT return for the period 01.04.2013 to 30.04.2013, it is found that the dealer has purchased goods of value Rs.81,34,49,267/-with payment of VAT Rs.81,34,495/-from M/s Punjab National Bank, Bhubaneswar, Tin-21301117904. Cross verification of sale invoice issued by the selling dealer M/s Punjab National Bank, Bhubaneswar, TIN-21301117904 at Column 57 reveals that the total sale vide invoice no.229-236, 238-242, 244-249, 255-258 to M/s Subash & Company, TIN-21191106567 for Rs.67,43,30,468/-with collection of VAT of Rs.67,43,306/-. Hence, prima facie, there is a huge mismatch and excess claim of ITC by M/s Subash & Company, Tin-21191106567 necessitating further investigation. The matter has been discussed with the DCCT, Enforcement, Bhubaneswar for detailed enquiry at both the ends and submission of enquiry report/evasion report. This is submitted for kind information. Yours faithfully, Deputy Commissioner of Commercial Taxes Bhubaneswar II Circle, Bhubaneswar Memo No:5477/CT, Dt:06.06.2013 Copy submitted to the Deputy Commissioner of Commercial Taxes, Enforcement Range, Bhubaneswar for information for necessary action. Sd/- 6.6.2013 Deputy Commissioner of Commercial Taxes Bhubaneswar II Circle, Bhubaneswar”. (underlined for emphasis) The above letter clearly shows the opposite party no.1 has clearly highlighted the discrepancies and accordingly wanted further investigation in the matter. As indicated earlier as admitted by the learned counsel for the Revenue, the same officer, who made the above noted communication has later acted as the Assessing Officer resulting in issuance of the assessment order under Annexure-1. A perusal of the assessment order shows that he himself has referred to his own proposal sent vide above noted letter dated 6.6.2013 for conducting further investigation regarding mismatch in claim of ITC and consequential loss of revenue. The assessment order further shows that the gist of letter dated 6.6.2013 has been reflected in the 2nd and 3rd Paragraphs of the assessment order itself. The assessment order further shows that the gist of letter dated 6.6.2013 has been reflected in the 2nd and 3rd Paragraphs of the assessment order itself. In such background, the likelihood of bias of opposite party no.2 while doing assessment cannot be ruled out. It is well settled that the principles of natural justice demand that nobody shall be a judge of his own cause. It is equally well settled that justice should not only be done but also should be manifestly be seen to have been done. In this context, it would be appropriate to quote the observations made by this Court in Tata Sponge Iron Limited –v-Commissioner of Sales Tax, Orissa and Others reported in (2012) 49 VST 33 (Orissa) has held as follows:- “Therefore, we are of the view that in order to maintain transparency, any officer who is involved in any manner or has acted with the process of audit and preparation of the audit report in respect of the dealer should not be the assessing officer of that dealer. Otherwise, there will be violation of cardinal principles of natural justice. Our view is fortified by the judgment of this court in National Trading Co. [2001] 122 STC 212 (Orissa) wherein this court held as follows:-(page 213 in 122 STC) : “…Although many contentions were raised in support of the writ petition, we need not examine them as the matter can be decided on the following: short point being that the reporting officer himself cannot be the assessing officer. It is said that justice should not only be done but should manifestly be seen to be done. Justice can never be seen to be done if a person acts as a Judge in his own cause or is himself interested in its outcome. This principle applies not only to judicial proceedings but also to quasi-judicial and administrative proceedings. In the case at hand, there is no dispute that the reporting officer himself took up the impugned assessment proceedings and completed the same. This he could not have done”. 9. Lastly, in ABB India Limited (supra) this Court has also made it clear that when a Deputy Commissioner involved in the audit process passes an assessment order based on that report the same clearly results in passing an order in violation of principles of natural justice. This he could not have done”. 9. Lastly, in ABB India Limited (supra) this Court has also made it clear that when a Deputy Commissioner involved in the audit process passes an assessment order based on that report the same clearly results in passing an order in violation of principles of natural justice. In the present case, the undisputed facts as indicated earlier show that the officer at whose instance further investigation was initiated on the basis of his prima facie finding relating to huge mismatch and excess claim of inputs tax credit by the petitioner, has himself conducted the assessment resulting in issuance of impugned assessment order under Annexure-1 and consequential demand notice under Annexure-2. Thus as stated earlier here the reasonable likelihood of bias cannot be ruled out. The officer, who was the author of letter dated 6.6.2013 quoted supra should not have acted as the Assessment Officer. In such background, this Court has no hesitation in quashing both the assessment order under Annexure-1 and demand notice under Annexure-2. However, we make it clear that we have expressed no opinion on the merits of this case. Accordingly, we direct the competent authority to re-assess the assesse and complete the reassessment, preferably, within a period of eight weeks from today, after giving reasonable opportunity of hearing to the petitioner keeping in mind the observations made above. The writ application is accordingly disposed of. No costs.