2022-VIL-769-ORI
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VAT High Court Cases

Central Sales Tax Act, 1956 - Assessment under Section 9(2) of the Central Sales Tax Act, 1956 – initiation of reassessment proceeding under Rule 12(4) of the Central Sales Tax (Odisha) Rules, 1957 and demand by rejecting the turnover relating to sales in course of export - While passing Reassessment Order Assessing Authority reversed the already allowed claim of exemption of penultimate sale under Section 5(3) of the CST Act and raised additional demand – Whether the exercise of power under Rule 12(4) of the CST(O) Rules is legally tenable when the claim of exemption on account of sale in course of export is supported by Certificate of Export in Form H – HELD - the Assessing Authority sought to review the Order passed under Rule 12(3) in the garb of exercise of power under Rule 12(4) of the CST(O) Rules - Neither any reason is assigned prior to issue of said notice contemplating initiation of proceeding under Rule 12(4) of the CST(O) Rules nor the record of proceeding indicated independent application of mind, such a course cannot be approved - formation of “opinion” is sine qua non for initiation of proceeding under Rule 12(4) of the CST(O) Rules, assignment of reason for such forming “opinion” is necessary concomitant factor - In the instant case, Assessing Authority merely directed for issue of notice in Form IVA without forming any “opinion” much less ascribing “reason”. This is indicative of non-application of mind and mechanical application of mind - In absence of power of review conferred by or under the statute, in the garb of reassessment, the concluded assessment could not be reopened by the Assessing Authority - As the material available on record does not show independent application of mind of the Assessing Authority having regard to the material in his possession, if any, merely based on objection of Auditor General, Odisha issue of notice in exercise of power under Rule 12(4) of the CST(O) Rules for reopening Audit Assessment concluded under Rule 12(3) on examination of books of account, etc. is impermissible in law and such an action is without jurisdiction – the impugned Assessment Order is set aside and the writ petition is allowed
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