Orissa High Court
State Of Orissa vs M/S. Orient Paper Mills Ltd on 18 July, 2022
IN THE HIGH COURT OF ORISSA AT CUTTACK
T. Rev. No.106 of 2001
State of Orissa, represented by the .... Petitioner
Commissioner of Sales Tax, Cuttack
Mr. S. S. Padhy, ASC
-versus-
M/s. Orient Paper Mills Ltd., .... Opposite Party
Sambalpur
Mr. K. K. Sahoo, Advocate
CORAM:
THE CHIEF JUSTICE
JUSTICE R. K. PATTANAIK
ORDER
Order No. 18.07.2022
13. 1. This revision petition by the State arises from an order dated 24th
April, 1986 passed by the Orissa Sales Tax Tribunal (Tribunal) in
Second Appeal Nos.64 to 66(C) of 1979-80.
2. The questions sought to be urged by the State for consideration
by this Court read as under:
"i. Whether the Tribunal is justified in partially allowing
the appeal when it came to a finding that books of account
maintained by the dealer did not give correct picture of its
activities?
ii. Whether the Tribunal is justified in deleting the
enhancement for all the impugned years basing on the fresh
evidence under Rule 61 of the O.S.T. Rules?"
3. The background facts are that the Opposite Party-Assessee is
engaged in carrying on the business of manufacturing and selling
paper. It is registered both under the Orissa Sales Tax Act, 1947
(OST Act) and Central Sales Tax Act (CST Act). The Sales Tax
Officer (STO) picked up the returns filed by the Assessee for three
years i.e. 1973-74, 1974-75 and 1975-76 and on the basis of best
judgment assessment, raised demands for the three years
respectively. The Assessee then filed appeals before the Assistant
Commissioner of Sales Tax, Sambalpur Range, Sambalpur (ACST).
While sustaining the rejection of books of accounts and adoption of
the best judgment assessment, the ACST allowed the appeals by
reducing the estimated turnover and thereby the demands.
4. The Assessee preferred appeals as did the State before the
Tribunal. The order of assessment was set aside by the Tribunal and
the matter remanded to the ACST for a fresh hearing. Pursuant to
an order dated 16th August, 1990 of this Court in SJC Nos.58 to 67
of 1981 and 85 to 90 of 1981, the case was reheard by the ACST.
For the second time, the ACST held in favour of the Assessee and
the State went before the Tribunal essentially on the finding of the
ACST that there was no suppression in the figures of production
given in the Assessee's balance sheet and the alleged stock of
bamboo. The Tribunal held against the State by observing as under:
"Considering the facts placed before us and as explained
and in absence of any other materials establishing
suppression having brought to record, we do not find any
illegality in the observation of the A.C.S.T. that there is no
suppression in so far as the shortage of bamboo stock
recorded at the time of stock taking."
5. The Tribunal negatived the plea of the State as regards the
conversion ratio converting the running feet into Metric Ton by
observing as under:
"From the above discussion it is now concluded that the
revised conversation ratio being not applicable to the year
in question, converting the running feet into MT on that
basis and alleging suppression of bamboos and consequent
sale suppression of paper is not at all justified. The dealer
having recorded the weight in terms of MT after weighment
of bamboo in the mill premises has consigned from the
lease out forest and there being no discrepancy detected for
established conversion ratio and consequent enhancement
of turnover on this count are now deleted."
6. Learned Additional Standing Counsel for the State sought to
contend that once the Tribunal accepted that the Assessee has not
maintained its books of account in the regular course of business, it
could not have declined to draw an adverse inference against the
Assessee on mere presumption.
7. The Court is unable to agree with the above submissions. The
Tribunal undertook a very detailed exercise and came to the
conclusion regarding lack of discrepancy in the exercise of
converting running feet into Metric Ton. In other words, there was
no material to support the contention of the State that there was any
suppression of bamboos. A very detailed discussion appears to
have been undertaken by the Tribunal and the findings are purely
factual.
8. In the circumstances, the Court is not persuaded that any error
has been committed by the Tribunal. Further, the deletion of the
enhancement for the three years was again based on facts with that
the evidence having been discussed in detail by the ACST and the
Tribunal.
9. Consequently, the Court declines to frame the questions as urged
by the Department.
10. The revision petition is dismissed.
(Dr. S. Muralidhar)
Chief Justice
(R. K. Pattanaik)
Judge
M. Panda
