Orissa High Court

M/S Siemens Ltd vs State Of Odisha And Others on 24 April, 2023

                   IN THE HIGH COURT OF ORISSA AT CUTTACK
                               W.P.(C) No. 5510 of 2015

M/s Siemens Ltd.                      .....                                     Petitioner
                                                                 Mr. B. Mohanti, Sr. Adv.

                                      Vs.
State of Odisha and others            .....                                Opposite Parties
                                                        Mr. Sunil Mishra, SC [CT & GST]
              CORAM:
                  DR. JUSTICE B.R. SARANGI
                  MR. JUSTICE M.S. RAMAN

                                              ORDER

24.04.2023 Order No. This matter is taken up through hybrid mode.

06.

2. Heard Mr. B. Mohanti, learned Senior Counsel appearing along with Mr. A. Mohanty, learned counsel for the petitioner and Mr. Sunil Mishra, learned counsel appearing for the CT & GST.

3. The petitioner has filed this writ petition seeking to quash the assessment order dated 20.02.2015 passed by the Assessing Authority- cum-Joint Commissioner of Sales Tax, Sundargarh Range, Rourkela under Annexure-1, by which direction has been issued to pay an amount of Rs.180,71,64,744/- to the Government Treasury within thirty days from the date of receipt of the notice and produce the receipt in proof of payment in the office within seven days from the date of payment, failing which the said sum will be recoverable from the petitioner as an arrears of public demand in accordance with the provisions of the Act. It has been further directed that in case the petitioner failed to pay the amount and produce evidence of such payment within due date, penalty at the rate of 2% per month on the unpaid amount of tax, interest, penalty or any other due under the Act will be imposed under Sub-section (5) of Section 50 and shall be liable to pay interest under Sub-section 50. It has been further observed that if the petitioner dissatisfied with the order imposing penalty/assessment and penalty or charging interest under Section 34, it may prefer appeal

before the Addl. Commissioner of Sales Tax, Northen Zone, Cuttack within thirty days.

4. Mr. B. Mohanti, learned Senior Counsel appearing along with Mr. A. Mohanty, learned counsel for the petitioner vehemently contended that though there is availability of appellate forum against the order passed by the assessing authority, but the order so passed is germane to be considered by this Court inasmuch as no useful purpose would be served in the event the petitioner approached the appellate authority because of the amount involved in the matter. It is brought to the notice of the Court that the assessing officer has not issued any notice of show cause to the petitioner and, as such, no opportunity of hearing has been given to the petitioner. Apart from the same the assessing authority has taken note of the fact that the petitioner has executed a composite work and relying upon the same the assessment made, cannot be sustained in the eye of law. It is further contended that the judgment which has been relied upon by the assessing authority to impose such assessment, i.e., M/s Cinzac Technical Service v. State of Kerala, (2009) 25 VST, 166-167 (Ker.), has already been set aside by the apex Court. Thereby, on a wrong premises, the assessment having been made, instead of preferring appeal, the petitioner has approached this Court invoking the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India.

5. Mr. Sunil Mishra, learned counsel appearing for the CT & GST vehemently contended that since the order impugned is appealable, instead of approaching the appellate forum, the petitioner could not have approached this Court. So far as merits of the writ petition is concerned, it is contended that the petitioner is liable to pay the demand raised by the authority. As such, by not paying the same the petitioner has approached this Court by filing the present writ petition, which is not maintainable. Consequentially, dismissal of the writ petition is

sought for.

6. Having heard learned counsel for the parties and after going through the records, this Court finds that though there is availability of alternative forum against the order passed by the assessing authority, but the reason for directly approaching this Court is tell tale. More so, making such assessment, the assessing authority has not issued any notice of show cause to the petitioner. It is contended that the goods being supplied from out of the State in course of inter-State trade and commerce while executing works contract, the transactions were claimed in the returns as exempted from levy of Central Sales Tax under Section 6 (2) of the Central Sales Tax Act, 1956, however, the Assessing Authority having disputed such transactions being sales intra-State falling under the OVAT Act while executing works contract of composite nature, he should have given opportunity to assessee to explain and justify claim of exemption. Thereby, the petitioner has been deprived of reasonable opportunity. As such, there is non- compliance of principles of natural justice and, as a consequence thereof, the petitioner has every right to invoke the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution of India. Apart from the same, the factual matrix has been noted by the assessing officer to the following effect:-

"Examination of the terms and conditions of the contract mentioned above reveals that the dealer company in question has executed a composite work involving Engineering, designing, supply, manufacturer, errection, installation, testing & commissioning of electrical equipments, substations, HT Package, captive power plant, generation, etc. integration of the system, demonstration, successful completion and establishment of performance parameter of the facilities and taking over of facilities by the contractees as per the requirement stipulated in the contract. The price for most of the contract is lump sum, having provision of the price adjustment. The risk and responsibilities of plants, equipments and other facilities lied with the contractor till commissioning, testing, establishment of performance parameter and final acceptance by the ultimate purchaser."

7. In view of the aforesaid factual matrix, it is made clear that since it is a works contract, the assessing officer has committed gross error in considering the contention that the work executed by the petitioner is a composite work. Therefore, basing upon the same the assessment so made by the assessing authority cannot sustain in the eye of law. Thereby, this Court is of the considered view that the order dated 20.02.2015 so passed by the assessing authority cannot be sustained in the eye of law and the same is liable to be quashed and is hereby quashed. Accordingly, the matter is remitted back to the assessing authority for being considered afresh by giving opportunity of hearing to the petitioner and by issuing notice of show cause in compliance to the principles of natural justice. Needless to say, since the assessment is for the period from 2011-2013 and in the meantime more than 10 years have passed and, as such, Mr. B. Mohanti, learned Senior Counsel appearing for the petitioner undertakes that the petitioner will not ask for any time, the assessing authority shall do well for early disposal of the matter.