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2021 DIGILAW 463 (ORI)

Associated Cement Company Ltd. v. State Of Orissa

2021-11-10

A.K.MOHAPATRA, S.MURALIDHAR

body2021
ORDER Dr. S. Muralidhar, CJ. - While admitting the revision petition on 6th July, 2006 the following issue was framed by this Court: 'Whether in the particulars facts and circumstances of the case the Division Bench, Orissa Sales Tax Tribunal is legally correct in not following the earlier order passed by another Division Bench of the Orissa Sales Tax Tribunal on identical facts and between the same parties; and whether such an order is legally sustainable in view of the law laid down by the Hon'ble Supreme Court in case of Collector of Central Excise vrs. Matador Eoam and others; reported in (2005) 4 RC 142.' 2. The background facts are that the Petitioner during the relevant period was a wholly owned Government of Orissa undertaking engaged in the manufacturing and sale of cement. For the purpose of its activities, the Petitioner had godowns in different areas. One such godown is located at Berhampur. On 8th July, 1992 the Inspector of Sales Tax visited the godown of the Petitioner's company, which was earlier M/s. Hira Cement Works, along with the Sales Tax Officer, (STO) Ganjam-I, Circle. During the course of the said visit the officers of the department verified the books of accounts including the stock register at the godown of the Petitioner-Company. The Inspector of Sales Tax found 37 slips of paper along with one diary from the godown premises and noticed certain entries made therein, on which basis, the STO, Ganjam submitted a report to the STO, Sambalpur-II Circle stating therein that the Petitioner is indulged in sale suppression for the year 1991-92 and 1992-93. He quantified the excess stock for 1991-92 at 1722 bags and for 1992-93 the excess stock of cement was quantified as 1239 bags. A fraud report dated 24th July, 1992 was prepared by the Inspector Sales Tax (IST), Ganjam-I Circle for the year 1991-92. The assessment was re-opened under Section 12(8) of the OST Act. 3. The Assessing Officer completed the reassessment confirming the demand of Rs.1,33,600/-. The assessee filed an appeal before the Orissa Sales Tax Tribunal (Tribunal), which was registered as S.A. No.7090 of 1994-95. The said appeal was allowed by the Tribunal by order dated 14th May, 2002, holding there was no conclusive evidence of any sale suppression of cement at the Berhampur godown. The assessee filed an appeal before the Orissa Sales Tax Tribunal (Tribunal), which was registered as S.A. No.7090 of 1994-95. The said appeal was allowed by the Tribunal by order dated 14th May, 2002, holding there was no conclusive evidence of any sale suppression of cement at the Berhampur godown. Further the mere fact of stock discrepancy was not sufficient to reject the books of accounts unless a positive instance of sale suppression was established. It was held that the whole exercise was on presumption and surmises. There was no corroborative evidence to establish the suppression of sales. 4. However, the Assessee's appeals for the year 1992-93 being S.A. No.148 of 1995-96 and S.A. No.7393 of 1994-95 were rejected by the Tribunal by order dated 24th December, 2005. The Tribunal distinguished its own order dated 14th May, 2002 on the ground that it pertained to a different period i.e. 1991-92. 5. Learned counsel appearing for the Department sought to distinguish the earlier order dated 14th May, 2002 of the Tribunal stating that as far as the year 1992-93 is concerned, there was some additional material justifying the reopening of the assessment and raising the demand. However, on a careful reading of the orders of the assessing authority, the appellate authority the Court finds that there is no reference therein to any additional material other then the fraud report which was common to both the years i.e. 1991-92 and 1992-93. Moreover, in the impugned order of the Tribunal relating to the year 1992-93, the Tribunal does not refer to any such additional material other than the fraud report. The Tribunal proceeded to accept the fraud report only on the ground that the earlier order of the Tribunal pertained to the year 1991-92 whereas the year in question was 1992-93. 6. A co-ordinate Bench of the same Tribunal had in its order dated 14th May, 2002 already disbelieved the same fraud report and concluded that there was no basis for raising the demand. In terms of the decision of the Supreme Court in Collector of Central Excise, Kanpur v. Matador Foam (2005) 2 SCC 59 the Tribunal was bound by the earlier order of the co-ordinate Bench involving the very same Assessee. 7. For the aforementioned reasons, the question framed by the Court is answered in negative i.e. in favour of the Assessee and against the Department. 8. 7. For the aforementioned reasons, the question framed by the Court is answered in negative i.e. in favour of the Assessee and against the Department. 8. The impugned order of the Tribunal is accordingly set aside and the revision petition disposed of.