Orissa High Court
M/S. Prasad Jewellery vs State Of Orissa on 25 April, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
STREV No. 347 of 2008
M/s. Prasad Jewellery .... Petitioner
Ms. Kajal Sahoo, Advocate
-versus-
State of Orissa .... Opposite Party
Mr. Sunil Mishra, Addl. Standing Counsel
CORAM:
THE CHIEF JUSTICE
JUSTICE R. K. PATTANAIK
ORDER
Order No. 25.04.2022
07. 1. While admitting this revision petition by an order dated 31st
August 2009, the following question of law was framed:
"Whether in the facts and circumstances of the
case, the alleged shortage of gold ornaments
(10.200gms.) and alleged purchase suppression
of Gems in absence of any evidence of sale of
such goods per se lead to sale suppression in
view of various judgments of this Hon'ble Court?
2. The present petition arises from an order dated 14th September
2007, passed by the Orissa Sales Tax Tribunal (Tribunal) in S.A.
No.812 of 2002-03. The said appeal was by the State of Orissa
against an order dated 26th June, 2002 of the Assistant
Commissioner of Sales Tax (ACST), Sundargarh Range, Rourkela,
whereby the original order of assessment dated 5th August 1996,
passed by the Sales Tax Officer (STO), Rourkela-I Circle, was
modified to delete the enhancement of the taxable turnover by
Rs.17Lakhs on the ground of alleged shortage of gold ornaments
and alleged suppression of purchase of gems. It appears that the
initial assessment was under Section 12(4) of the Orissa Sales Tax
Act, 1947 (OST Act) during which there were two reports
considered by the STO. A third report led to re-assessment under
Section 12 (8) of the OST Act and this was challenged before the
ACST by the Assessee.
3. In the order dated 26th June 2002, the ACST inter alia, observed
as under:
"The first two reports were considered in the
original assessment by enhancing the returned
turnovers by Rs.2,70,000/-. Then the third report
is received belatedly for which 12(8) proceedings
initiated. The date of visit as per the 3rd report
falls in between the dates of visit according to the
first two reports. While disposing of the first two
reports in the original assessment proceeding the
LAO considered enhancement to the extent of
Rs.2,70,000/- upon estimation of all probable
suppressions for the entire period. As such a sum
of Rs.2,67,300/- has been fixed for all such
probable suppressions. As per the 3rd report,
according to the LAO, the suppression to the
extent of Rs.11,000/- could be established which
is well within the above probable suppressions
limit of Rs.2,67,300.00."
4. When the State then took the matter further in appeal before the
Tribunal, it did not agree with the conclusions of the ACST on the
basis that the 3rd report according to the Tribunal was a separate
report "wherefrom clear cases of suppression have been unearthed".
5. Having heard learned counsels for the parties, the Court is of the
view that the Tribunal has failed to give reasons why the order of
the STO enhancing the taxable turnover by Rs.17lakhs should be
restored and the order of the ACST deleting the said enhancement
was being set aside.
6. In cases of suppression of purchase of gems or shortage of gold
ornaments, the burden is on the Department to prove such
shortage/suppression. This Court in Mahabir Rice Mill v. State of
Orissa (1983) 54 STC 218 (Ori) held that there has to be some
credible material to establish that goods have been found short sold
or that has been a suppression in the matter of purchase of gems.
The Court is unable to find any such material produced by the
Department to substantiate the conclusions in the impugned order
of the Tribunal.
7. Consequently, the question framed by this Court is answered by
holding that there could not have been any enhancement in the
taxable turnover in the absence of evidence of shortage of gold
ornaments or suppression of purchase of gems. In other words, the
question is answered in favour of the Assessee and against the
Department.
8. The revision petition is disposed of in the above terms.
(Dr. S. Muralidhar)
Chief Justice
(R. K. Pattanaik)
Judge
S. Behera
