(q) of Section 2 of the OET Act-- ―Words and Expressions used herein and not
defined in this Act, but defined in the VAT Act shall have the meaning respectively
assigned to them in that Act‖-- read with clause (47) of Section 2 of the Odisha
Value Added Tax Act, 2004 defining the term ―self-assessment‖ to mean ―a true
and correct determination of net tax liability by a dealer in relation to any tax
period‖.
Assessment under Section 9C was initiated by service of
a Notice in Form E-30 as required under Rule 15B of the
OET Rules construing said ―Intelligence Report‖ as if it
were an ―Audit Visit Report‖ submitted under Section 9B
of the OET Act read with Rule 11 of the OET Rules. The
petitioner participated in the said Audit Assessment
proceeding. Upon consideration of objections contained
in such report that the liability of entry tax was not
appropriately discharged by including customs duty paid
on the ―imported goods‖ brought into the local area for
consumption, use or sale therein while computing
―purchase value‖ in tune with the definition given at
clause (j) of Section 2, and hearing the advocate for the
petitioner-company by confronting the Intelligence
Report vis-a-vis the self-assessment returns, the
Assistant Commissioner of Sales Tax (LTU), Cuttack-II
Range, Cuttack passed Audit Assessment Order dated
02.08.2006 under Section 9C of the OET Act raising
demand to the tune of Rs.84,92,548/-.
2.3. Against the aforementioned Audit Assessment under
Section 9C of the OET Act so framed by Order dated
02.08.2006, an appeal under Section 16 of the OET Act
being preferred, the Additional Commissioner of Sales
Tax (Appeal), Commissionerate of Commercial Tax and
Goods and Services Tax, Odisha at Cuttack, on detailed
examination of fact and appreciation of law was pleased
to pass following order on 16.07.2019:
(2) After identification of individual dealers or class of dealers for tax audit
under sub-section (1), the Commissioner shall direct that tax audit in
respect of such individual dealers or class of dealers be conducted and for
the purpose of conduct of such tax audit under this section, the provisions
contained in Section 41 of VAT Act shall mutatis mutandis apply:
(3) Tax audit shall ordinarily be conducted in the prescribed manner in the
business premises or office or godown or warehouse or any other place,
where the business is normally carried on by the dealer or stock in trade
or books of account of the business are kept or lodged temporarily or
otherwise.‖
See Rule 11 of the OET Rules, which prescribes detailed Audit process.
statutory officer who is the creation of the statute cannot
transgress such provisions contained in the statute.
With the above facts and circumstances of the case and
without delving further into factual disputes involved, this
forum set aside the impugned Assessment Order passed
by the learned Assessing Officer for the material period
with a direction to initiate proper proceedings strictly in
accordance with the provisions of the OET act and Rules
made thereunder.
The case is disposed off accordingly.‖
2.4. Be it noted here that till 19.07.2019 when the
aforementioned Appellate Order was passed no
communication was received by the petitioner about the
fate of its self-assessment returns with respect to the tax
periods from 01.04.2005 to 28.02.2006. Nevertheless, on
09.12.2019 the Deputy Commissioner of Sales Tax,
Commercial Tax and Goods and Services Tax Circle,
Paradeep (for brevity, ―DCST‖) issued a Letter dated
09.12.2019 with the caption heading ―production of
books of account for the period 01.04.2005 to 28.02.2006
(set-aside) under the Entry Tax Act, 1999‖ directing the
petitioner to appear before the Deputy Commissioner of
Sales Tax on 06.01.2020 and produce books of account
―for the purpose of reassessment for the tax periods
01.04.2005 to 28.02.2006 under the Entry Tax Act,
1999‖. In obeisance, the petitioner appeared and filed a
Hazira-cum-written submission stating therein that
there was no completion/conclusion of self-assessment
in tune with Section 9(2) of the OET Act. Furthermore,
there is absence of Audit Visit Report contemplated
under Section 9B read with Rule 11. The Appellate
Authority Order set aside the Audit Assessment under
Section 9C for want of jurisdiction. Ergo, as time period
of five years (prior to amendment) had already been
elapsed, no proceeding for reassessment under Section
10(1) was permissible. The petitioner again appeared on
06.02.2023 to state by furnishing written submission
that Section 10 3 dealing with ―Reassessment in certain
3 Section 10 of the OET Act stood thus:
―10. Reassessment in certain cases.--
(1) Where for any reason all or any of the scheduled goods brought by a
dealer has escaped assessment of tax, or where value of all or any of the
scheduled goods has been under-assessed, or any deduction has been
allowed wrongly, the assessing authority, on the basis of information in
his possession, may, a[within a period of seven years] from the end of the
year to which the tax period relates, serve a notice on the dealer in such
form and in such manner as may be prescribed and after making such
enquiry as he considers necessary and after giving the dealer a
reasonable opportunity of being heard, proceed to assess the dealer
accordingly.
(2) If the assessing authority is satisfied that the escapement a[or under
assessment of tax on account of any reason(s) mentioned in sub-section
(1) above] is without any reasonable cause, he may direct the dealer to
pay in addition to the tax assessed under sub-section (1), by way of
penalty, a sum equal to twice the amount of tax additionally assessed
under this section.
(3) Where any order passed by the assessing authority in respect of a dealer
for any period is found to be erroneous or prejudicial to the interest of
revenue consequent to, or in the light of, any judgment or order of any
Court or Tribunal, which has become final and binding, then,
notwithstanding anything contained in this Act, the assessing authority
may proceed to reassess the tax payable by the dealer in accordance with
such judgment or order, at any time within a period of three years from
the date of the judgment or order.‖
__________________
a. Substituted ―within a period of five years‖ by the Odisha Entry Tax
(Amendment) Act, 2011 (Odisha Act 2 of 2012), assented to by the
Governor on 10.02.2012, vide Law Department Notification No. 1742-
Legis.-7/11/L, dt.15.02.2012, published in Orissa Gezette Extraordinary
No. 257, dt. 16.02.2012. This Amendment Act came into force w.e.f.
01.07.2012, vide Finance Department Notification No. 23154-FIN-CT1-
cases‖ does not cover reassessment on remand by the
Appellate Authority who set aside the Audit Assessment
under Section 9C 4 . A ground of demur relying on
decisions of this Court, namely ECMAS Resins Pvt. Ltd.
TAX-0022/2012/F. (SRO No.312/2012), dt. 18.06.2012, published in
Orissa Gazette Extraordinary No. 1183, dt. 18.06.2012.
4 Section 9C of the OET Act stood thus:
―9C. Audit assessment.--
(1) Where the tax audit conducted under Section 9B results in the detection of
suppression of purchases or sales, or both, erroneous claims of
deductions, evasion of tax or contravention of any provisions of this Act
affecting the tax liability of the dealer, the assessing authority
notwithstanding the fact that the dealer may have been assessed under
Section 9 or 9A, serve on such dealer a notice in the form and manner
prescribed along with a copy of the Audit Visit Report, requiring him to
appear in person or through his authorised representative on a date and
place specified therein and produce or cause to be produced such books of
account and documents relying on which he intends to rebut the findings
and estimated loss of revenue in respect of any tax period or periods as
determined on such audit and incorporated in the Audit Visit Report.
(2) Where a notice is issued to a dealer under sub-section (1), he shall be
allowed time for a period of not less than thirty days for production of
relevant books of account and documents.
(3) Where the dealer to whom a notice is issued under sub-section (1)
produces the books of account and other documents, the assessing
authority may, after examining all the materials as available with him in
the record and those produced by the dealer and after causing such other
enquiry as he deems necessary, assess the tax due from that dealer
accordingly.
(4) If the dealer fails to appear or cause appearance, or fails to produce or
cause production of the books of account and documents as required
under sub-section (1), the assessing authority may proceed to complete
the assessment to the best of his judgment basing on the materials
available in the Audit Visit Report and such other materials as may be
available, and after causing such enquiry as he deems necessary.
(5) Without prejudice to any penalty or interest that may have been levied
under any provision of this Act, an amount equal to twice the amount of
tax assessed under sub-section (3) or (4) shall be imposed by way of
penalty in respect of any assessment completed under the said sub-
sections.
(6) Notwithstanding anything contained to the contrary in any provision
under this Act, an assessment under this section shall be completed
within a period of six months from the date of service of notice issued
under sub-section (1) along with the Audit Visit Report:
Provided that if, for any reason, the assessment is not completed within
the time specified in this sub-section, the Commissioner may, on the merit
of each such case, allow such further time not exceeding six months for
completion of the assessment proceeding.
(7) No order of assessment shall be made under sub-section (3) or (4) after
expiry of one year from the date of receipt of the Audit Visit Report.‖
Vrs. State of Odisha, 2022 (II) ILR-CUT 817 (Full Bench)5
and Shayam Metallics and Energy Limited Vrs.
Commissioner of Commercial Tax, W.P.(C) No. 7458 of
2015 vide Order dated 05.08.2022 was taken. It is
contended that unless self-assessment returns are
accepted in consonance with provisions of sub-section
(1) and sub-section (2) of Section 9 of the OET Act,
reassessment under Section 10 cannot be said to have
triggered.
2.5. Nevertheless, a Letter dated 31.03.2023 was issued by
the Joint Commissioner of Sales Tax under the caption
heading ―Regarding initiation of set aside proceedings for
the period 01.04.2005 to 28.02.2006 under the OET Act,
1999‖ with reference to ―Reply dated 06.02.2023‖ filed
by the petitioner. Mentioning the dates of filing of
returns for the tax periods from 01.04.2005 to
28.02.2006, it is stated in the said letter that ―In view of
the above, you have self-assessed under Section 9(1) and
(2) of the OET Act which is accepted‖. Flagging
impermissibility of initiation of proceeding for
reassessment under Section 10, a written objection was
filed by the petitioner vide Letter of Reply dated
20.04.2023, wherein it is highlighted as follows:
5 The judgment of Full Bench of this Court being carried to the Hon'ble Supreme
Court of India in State of Odisha Vrs. ECMAS Resins Pvt. Ltd., S.L.P.(C) No.5285
of 2023, the following Order dated 17.03.2023 was passed::
―Delay condoned. The Special Leave Petition stands dismissed. Pending
application stands disposed of.‖
―Now we have received the aforesaid communication,
where your good office in order to overcome the
Judgement of Orissa High Court in the matter of ECMAS
Resins Pvt Ltd. Vrs. State of Odisha has accepted the
returns on 31.03.2023. In this regard, we would like
to inform you that, during pendency of proceeding
under Section of the OET Act a further proceeding
under Section 9(1) and (2) cannot be initiated and
therefore your aforesaid notice/communication is
legally not tenable.
In view of above facts and submission, your Honour is
requested to drop the reassessment proceedings. The
above information may please be kept on record and the
letter may please be acknowledged.‖
2.6. Nonetheless, the Joint Commissioner of Sales Tax issued
Notice dated 24.04.2023 in Form E-32 prescribed under
Rule 15D contemplating proceeding under Section 10 of
the OET Act which was carried in revision under Section
18 of the OET Act, wherein the Commissioner of
Commercial Tax and Services Tax, Odisha vide Order
dated 21.08.2023 having noted the result in the appeal
against assessment under Section 9C and acceptance of
self-assessment returns under Section 9 observed as
follows:
―Gone through the grounds of petition filed by the
petitioner and the statutory remedies available. Since any
order is yet to be passed by the assessing authority and
the revision petition is filed against an intimation, the
revision petition itself stands devoid of merit. Since, the
above communication does not bear any characteristic or
testimony of an order, the instant petition itself does not
fall under the purview of Section 18(3) of the OET Act
1999 and as such the merit of the same cannot be tested
in revision. Resultantly, the petition filed under Section
18(3) of the OET Act 1999 is rejected being devoid of
merit.‖
2.7. After disposal of the revision, the Joint Commissioner of
Sales Tax issued a fresh Notice dated 08.09.2023 in
Form E-32 ―for assessment on tax in case of escaped
turnover or under assessment‖ omitting the reason for
reassessment contained in the earlier Notice dated
24.04.2023 in Form E-32. Admitting the fact that the
decision in ECMAS Resins Pvt. Ltd. (supra) has attained
finality, the Joint Commissioner of Sales Tax proceeded
to finalise the assessment apparently under sub-section
(1) and sub-section (2), but not under sub-section (3), of
Section 10 vide Order dated 12.07.2024 by overturning
objection as to said assessment being barred by
limitation with the following observation:
―Furthermore, since no final order of assessment under
Section 10 of the OET Act had been passed and only a
communication of acceptance of self-assessed returns for
the impugned period had been done on dated 31.03.2023,
action of the dealer-company in preferring revision against
the communication dated 31.03.2023 was found to be
premature, For the said reason, the revision petition filed
to that effect was rejected by the Commissioner of Sales
Tax In order dated 23.08.2023.
Thus, the objection raised on the Issue of limitation and
maintainability does not hold ground.‖
2.8. Assailing the legality, rationality and tenability of the
Reassessment Order dated 12.07.2024 (Annexure-9)
passed by the Assessing Authority invoking power under
Section 10 of the OET Act, the present writ petition has
been filed.
Hearing:
3. Counter affidavit dated 30.06.2025 has been filed being
sworn to by the Deputy Commissioner of Commercial
Tax and Goods and Services Tax (Law) clearly stating
that the assessment impugned in the writ petition has
been undertaken by not taking recourse to power
conferred under sub-section (3) of Section 10 (vide
paragraph 7 of the counter affidavit). Emphasising that
the case would fall within the ken of Rule 34 of the OET
Rules read with Section 49(2) of the OVAT Act, it is
stated that there cannot be imputation of flaw in
exercising jurisdiction by the JCST by communicating
acceptance of self-assessment returns though after
disposal of appeal challenging the Order in Audit
Assessment under Section 9C of the OET Act.
3.1. A rejoinder affidavit in reply to the contention(s) of the
Revenue in the counter affidavit has been filed by the
petitioner.
3.2. Heard Sri Bibekananda Mohanti, learned Senior
Advocate assisted by Sri Sayed Shahzeb Ali, learned
Advocate for the petitioner and Sri Sunil Mishra, learned
Standing Counsel representing the opposite parties.
3.3. Hearing being concluded, the matter stood reserved for
preparation and pronouncement of Judgment/Order.
Arguments and submissions:
4. Sri Bibekananda Mohanti, learned Senior Advocate
being assisted by Sri Sayed Shahzeb Ali, learned
Advocate submitted that by way of counter affidavit the
Revenue having sought to read provisions of Section
10(3) of the OET Act into Section 49(2) of the OVAT Tax
Act, 2004 taking shelter of Rule 34 is inexplicable. Given
the factual position obtained on record would
unequivocally indicate that the assessment framed
under Section 10 of the OET Act vide Order dated
12.07.2024 is hit by limitation.
4.1. It is vociferously argued that in the light of decision/
order of the Appellate Authority, proceeding under
Section 10(3) of the OET Act is incompetent in view of
Indian Oil Adani Ventures Limited Vrs. State of Odisha,
2025 SCC OnLine Ori 4024.
4.2. It is submitted that as the self-assessment returns got
merged with the Audit Assessment under Section 9C of
the OET Act, though the same got set aside by the
Appellate Authority, in view of ECMAS Resins Pvt. Ltd.
Vrs. State of Odisha, 2022 (II) ILR-CUT 817 (Full Bench)
in the absence of communication of acceptance of
return(s) filed under sub-section (1) read with sub-
section (2) of Section 9 the OET Act by way of formal
communication to the petitioner prior to initiation of
proceeding vide Notice dated 24.04.2023 in Form E-32,
the demand by way of reassessment under Section 10 of
the OET Act shall not survive. The subsequent Notice
dated 08.09.2023 in Form E-32 abandoning the earlier
one and discarding reason stated in the earlier notice
cannot be held to be validly made.
5. Sri Sunil Mishra, learned Standing Counsel though did
not dispute the facts as unfurled in the writ petition,
submitted that the assessment under Section 9C of the
OET Act based on Intelligence Report being not in
consonance with the procedure established in the
statute, the Appellate Authority having directed the
Assessing Authority to do the assessment by adhering to
correct procedure, no fault can be attributed in passing
the Assessment Order dated 12.07.2024. The Assessing
Authority having accepted the self-assessment returns
by following the interpretation of this Court in ECMAS
Resins Pvt. Ltd. Vrs. State of Odisha, 2022 (II) ILR-CUT
817 (Full Bench) proceeded to assess the tax liability
under Section 10(1). Thus, no infirmity can be imputed
against such action of the Assessing Authority in
adopting correct procedure in order to appropriately
determine the tax liability.
5.1. Referring to the stand taken by the Revenue in the
counter affidavit and the scope of proceeding with
Section 10(1) of the OET Act in view of Bhusan Power
and Steel Ltd. Vrs. State of Odisha and Others, reported
in (2012) 47 VST 466 (Ori), the learned Standing Counsel
has sought to support the action of the Authority
concerned.
Consideration of arguments and submissions:
6. It does emanate from Order dated 31.03.2023 of the
JCST (Annexure-4) that self-assessment returns with
respect to tax periods from 01.04.2005 to 28.02.2006
are stated to have been filed as follows:
Sl. No. Month Date of filing of return
01 April, 2005 26.05.2005
02 May, 2005 25.06.2005
03 June, 2005 25.07.2005
04 July, 2005 25.08.2005
05 August, 2005 26.09.2005
06 September, 2005 26.10.2005
07 October, 2005 28.11.2005
08 November, 2005 26.12.2005
09 December, 2005 25.01.2006
10 January, 2006 24.02.2006
11 February, 2006 27.03.2006
6.1. The Sales Tax Officer, Intelligence submitted a Report
bearing No.96, dated 29.03.2006. Assessment Order
dated 02.08.2006 passed by the Assistant Commissioner
of Sales Tax (LTU) reveals that ―On receipt of Audit Visit
Report, Notice in Form E-30 was issued to the dealer
fixing date to 10.07.2006‖. Section 9B of the OET Act
speaks of ―tax audit‖, which was to be undertaken as
provided under Section 41 of the Odisha Value Added
Tax Act, 2004 (―OVAT Act‖, for short) read with Rule 41
of the Odisha Value Added Tax Rules, 2005 (―OVAT
Rules‖, for brevity). Assessment under Section 9C is
supposed to be undertaken ―where the tax audit
conducted under Section 9B results in the detection of
suppression of purchases or sales, or both, erroneous
claims of deductions, evasion of tax, or contravention of
any provisions of this Act affecting the tax liability of the
dealer‖. Notwithstanding the fact that the dealer may
have been assessed under Section 9 (Self-Assessment) or
Section 9A (Provisional Assessment), the assessing
authority was required to serve on such dealer a notice
in the Form E-30 along with copy of Audit Visit Report
and proceed with the assessment in the manner
prescribed, viz., Rule 15B of the OET Rules. Said Notice
must contain instruction to the dealer ―to appear in
person or through his authorised representative on a date
and place specified therein and produce or cause to be
produced such books of account and documents relying
on which he (the Assessing Authority) intends to rebut the
findings and estimated loss of revenue in respect of any
tax period or periods as determined on such audit and
incorporated in the Audit Visit Report‖. Though Report
submitted by the Sales Tax Officer, Intelligence was not
in consonance with the modalities provided in Section
9B of the OET Act read with Section 41 of the OVAT Act
and the Rules framed thereunder, treating it to be ―Audit
Visit Report‖, the Assessing Authority proceeded with
the Audit Assessment under Section 9C. The jurisdiction
and authority of such assessment being assailed in the
statutory appeal under Section 16, stemming on ratio
laid down in Bhusan Power and Steel Limited Vrs. State
of Odisha, (2012) 47 VST 466 (Ori) the Additional
Commissioner of Sales Tax (Appeal) set aside the
Assessment Order dated 02.08.2006 passed under
Section 9C of the OET Act with further direction ―to
initiate proper proceedings strictly in accordance with the
provisions of OET Act and Rules made thereunder‖.
6.2. As if the Appellate Order is an order of remit, and the
same proceeding under Section 9C revived, the Deputy
Commissioner of Sales Tax vide Letter dated 09.12.2019
directed the petitioner to produce books of account and
other documents relating to the tax periods from
01.04.2005 to 28.02.2006. Opposing such action, the
petitioner cited that Section 10 of the OET Act
contemplates reassessment under certain cases which
does not engulf within itself set aside/remand cases.
Having perused Section 10 this Court finds force in such
objection put forth by the petitioner.
6.3. What must be highlighted from the Appellate Order
referred to above is to ―initiate proper proceedings strictly
in accordance with the provisions of OET Act and Rules
made thereunder‖. Section 10 of the OET Act empowers
the Assessing Authority to initiate proceeding where for
any reason all or any of the scheduled goods brought by
a dealer has escaped assessment of tax, or where value
of all or any of the scheduled goods has been under-
assessed, or any deduction has been allowed wrongly,
the Assessing Authority, on the basis of information in
his possession, may, within a period of seven years [five
years, pre-amended position] from the end of the year6 to
which the tax period 7 relates, serve a notice on the
dealer in such form and in such manner as may be
―prescribed‖8 [i.e., in Form E-32 in terms of Rule 15D of
the OET Rules] and after making such enquiry as he
considers necessary and after giving the dealer a
reasonable opportunity of being heard, proceed to assess
the dealer accordingly.
6 As per Section 2(p) of the OET Act, ―Year‖ means ―the Financial Year‖.
7 As per Section 2(oo) of the OET Act, ―Tax period‖ means ―such period for which
return is required to be furnished by or under this Act‖.
8 ―Prescribed‖ has been defined in Section 2(i) in the OET Act to mean ―prescribed
by Rules‖.
6.4. Having noticed the statutory provisions of the OET Act
and relevant Rules framed thereunder and taking note of
principles that the Court is not supposed to supply the
gaps in the statute, this Court in ECMAS Resins Pvt. Ltd.
Vrs. State of Odisha, Vrs. State of Odisha, 2022 (II) ILR-
CUT 817 (Full Bench) held as follows:
―43. The sum total of the above discussion is that as far
as a return filed by way of self assessment under
Section 9(1) read with Section 9(2) of the OET Act is
concerned, unless it is ‗accepted' by the Department
by a formal communication to the dealer, it cannot
be said to be an assessment that has been accepted
and without such acceptance, it cannot trigger a
notice for reassessment under Section 10(1) of the
OET Act read with 15B of the OET Rules. This
answers the question posed to the Court.
44. As far as the individual writ petition is concerned, it
is ordered as under:
(i) In W.P.(C) No.7458 of 2015 filed by ERPL, the
impugned re-assessment order dated 19th February
2015 and the consequential demand, if any, raised
are hereby quashed.
(ii) In W.P.(C) No. 7296 of 2013 filed by SMEL, the
impugned reassessment order dated 23rd February
2013 and the consequential demand notice
(Annexure-3) are hereby quashed.‖
6.5. After such an authoritative enunciation of law, it seems
wisdom dawned and the Assessing Authority taking
advantage of Appellate Order dated 16.07.2019 setting
aside the Assessment Order passed under Section 9C,
undertook exercise of ―acceptance‖ of self-assessment
returns which were furnished at the relevant point of
time, i.e., during 2005-06. Since tax periods under
assessment are covered within 01.04.2005 to
28.02.2006, end of the year would be 31.03.2006. ―Five
years from the end of the year to which the tax period
relates‖ as it existed prior to 01.07.2012, i.e., prior to
date of effect of the OET (Amendment) Act, 2012, would
lapse on 31.03.2011. By the date the amendment came
into force on 01.07.2012, the five years period from
31.03.2006 had already expired. Therefore, even for the
purpose of reassessment, jurisdiction to initiate
proceeding under sub-section (1) of Section 10 of the
OET Act lapsed by the date the Appellate Order set aside
the Audit Assessment Order under Section 9C.
Admittedly on the said date of Appellate Order self-
assessment returns were not scrutinised and/or
accepted and no communication thereof had ever been
made by that date.
6.6. Be that be, it emanates from Letter dated 31.03.2023 of
the Joint Commissioner of Sales Tax that:
―In view of above, you have accepted the order and raised
no issue on non-communication of Order under Section 9
of the OET Act before the appropriate forum. Further,
issue of time limitation is covered under Section 49(2) of
the OVAT Act read with Rule 34 of the OET Act. Hence,
you are not entitled to raise that issue at this point of
time. Besides that, you have filed returns for the period
01.04.2005 to 28.02.2006 under OET Act is as follows:
*** Accordingly, as per the above, you have self-assessed
under Section 9(1) and (2) of the OET Act which is
accepted.‖
6.7. It is discernible that notwithstanding that the
Intelligence Report pointing out suppression/
escapement of turnover was submitted in the year 2006,
(such Report being the foundation for initiation of
proceeding for Audit Assessment under Section 9C), in
the year 2023 the JCST communicated the factum of
acceptance of such self-assessment returns. Such
mechanical application of mind is incoherent with the
statutory requirement inasmuch as the ―acceptance‖ of
self-assessment returns is made vide Letter dated
31.03.2023 ex facie speaks volumes. Only to cover up
latent deficiency and lacunae, such exercise was made
in order to proceed with the reassessment under Section
10 of the OET Act, even though the Assessing Authority
lacked jurisdiction as the period has become time-
barred.
6.8. Acknowledgment of ―acceptance‖ of self-assessment
returns filed during the year 2005-06 by stating that
―Accordingly, as per the above, you have self-assessed
under Section 9(1) and (2) of the OET Act which is
accepted‖ by way of Letter dated 31.03.2023 runs
contrary and incongruous to what is reflected in the
statutory Form E-32 dated 24.04.2023, which depicts
date of self-assessment being made at paragraph 4
(Annexure-6):
―You have been assessed under Section 9C of the Odisha
Entry Tax Act, 1999 for the tax period(s) 01.04.2005 to
28.02.2006 on 02.08.2006.‖
There is no record to substantiate such fact of
acceptance and communication thereof at the relevant
point of time. Being fully aware of the fact that self-
assessment returns pales into insignificance on the
Audit Assessment being undertaken, the same JCST
issued fresh Notice in Form E-32 on 08.09.2023
(Annexure-8), which depicts the following:
―You have been assessed under Section 9 of the Orisha
Entry Tax Act 1999 for the tax period(s) 01.04.2005 to
28.02.2006 on _________ and communicated to that effect
have been made on 31.03.2023.‖
It is, thus, emerged that abandoning the reason ascribed
for initiation of the proceeding by issue of earlier Notice
in Form E-32, dated 24.04.2023 (Annexure-6), the above
fresh Notice in Form E-32, dated 08.09.2023 was issued
citing a different reason. The aforesaid factual position
as obtained in record manifests that the self-assessment
returns were never accepted. There has been change of
opinion and/or manipulation of record to camouflage
that the initiation for reassessment under Section 10
has been made after acceptance of returns in tune with
mandate of sub-section (1) and sub-section (2) of Section
9.
6.9. Minute scrutiny of both the Notices in Form E-32, viz.,
Notice dated 24.04.2023 (Annexure-6) and Notice dated
08.09.2023 (Annexure-8), would show that whereas the
former notice purported to have been issued on the
premise of Appellate Order being passed so as to engulf
within it the initiation of proceeding was made under
sub-section (3) of Section 10, the latter notice issued
based on acceptance of self-assessment returns which
would appear to have been issued under sub-section (1)
of Section 10. It is admitted by the opposite parties at
paragraph 7 of the counter affidavit that the instant
reassessment was not initiated invoking provisions of
sub-section (3) of Section 10 of the OET Act.
6.10. This Court would now analyse both the notices.
6.11. The Assessing Authority is competent to initiate
proceeding for reassessment ―within a period of seven
years from the end of the year to which the tax period
relates‖ by serving ―a notice on the dealer in such form
[Form E-32] and in such manner as may be prescribed
[Rule 15D]‖ as provided under sub-section (1) of Section
10. Notice in Form E-32 (Annexure-6) for the tax periods
from 01.04.2005 to 28.02.2006 being issued on
24.04.2023 and Notice in Form E-32 (Annexure-8) for
the self-same tax periods being issued on 08.09.2023
they are barred by limitation as provided under sub-
section (1) of Section 10.
6.12. As admitted in the counter affidavit that the present
case does not fall within the scope of Section 10(3) of the
OET Act, obviously it would be comprehended within the
ambit of sub-sections (1) and (2) of Section 10. The
computation of period of limitation as envisaged under
Section 10(1) of the OET Act can be couched by referring
to the following decisions of this Court.
6.13. In this regard following observations of this Court in the
case of Shree Jagadamba Coal Centre Vrs. Joint
Commissioner of Sales Tax, W.P.(C) No. 28030 of 2013,
vide Order dated 23.07.2015 may fruitfully be referred
to:
―In view of the submission made and the provision of law
as noted hereinabove, this writ application is allowed and
the Order of Assessment dated 30.01.2013 passed by the
Deputy Commissioner of Sales Tax, Cuttack-II Circle,
Cuttack is quashed on the ground of limitation for the
period prior to 1st April, 2008, in other words, the Order of
Assessment is barred by limitation for the period from
01.07.2005 to 31.03.2008 and remit the matter back to
the Assessing Officer to pass fresh Assessment Order for
the balance period i.e. from 01.04.2008 to 31.03.2010
within a period of three months from the date of receipt of
the certified copy of this order. For such purposc, the
petitioner shall appear before the Assessing Officer on
10.08.2015.‖
6.14. In B.D. Patnaik Vrs. Deputy Commissioner of Sales Tax,
W.P.(C) No.8802 of 2014 this Court vide Order dated
13.05.2014, it has been held as follows:
―The only submission which has been pressed on behalf
of the petitioner is that the impugned order of assessment
relates to the period beyond the statutory limitation of
seven years from the end of the tax period. The impugned
Order dated 21.03.2014 could not thus cover any period
prior to 1st March, 2007, while in the present case the
impugned Order has covered the period from 01.04.2006
to 31.08.2009, and to the extent the impugned order
covers period in respect of which assessment has become
time barred, it is liable to be set aside.
The above legal position is not disputed by the learned
counsel for the Revenue in view of the provision of Section
43 of the OVAT Act, 2004.
Accordingly, we quash the impugned order of assessment
relating to the tax period prior to 1st March, 2007 with
liberty to the Assessing Authority to pass a fresh order in
accordance with law.‖
6.15. Taking cue from such view expressed by this Court,
when the instant matter is examined it could be
discerned that the tax periods involved in the present
matter is from 01.04.2005 to 28.02.2006. If end of the
year to which tax periods from 01.04.2005 to
28.02.2006 relates is considered, Notice in Form E-32 in
terms of Rule 15D of the OET Rules read with sub-
section (1) of Section 10 of the OET Act, as amended
with effect from 01.07.2012, was required to be served
―within seven years from the end of such tax period‖. In
the case at hand the Notices in Annexure-6 and
Annexure-8 were served on the petitioner in the year
2023.
6.16. It may also be noticed that the words ―within a period of
seven years‖ has been substituted for ―within a period of
five years‖ by way of the Odisha Entry Tax (Amendment)
Act, 2012, with effect from 01.07.2012 by virtue of
Finance Department Notification dated 18.06.2012.
6.17. Notice can be taken of legal perspective of the word
―substitution‖. It is relevant for the purpose of
considering whether aforesaid substitution qua
limitation for the purpose of assessment under Section
10(1) would take retrospective effect.
6.18. In Commissioner of Income Tax Vrs. Goslino Mario, (2000)
241 ITR 314 (Gau) it has been observed as follows:
―11. As to this Shri Joshi has submitted that the
Explanation is not only procedural but it has
affected the substantive right of the assessees.
Learned counsel referred to a large number of
decisions to satisfy us that if vested rights are
affected the statute has to be regarded as only
prospective and not retrospective. For the purpose of
the present case, we do not express our opinion on
this aspect of the matter inasmuch as according to
us even if the Explanation is given effect from April
1, 1979, which is the date mentioned in this
connection, the cases of the assessees being
relatable to the assessment year 1976-77, their
cases could not have been governed by the
Explanation inasmuch as it is settled law that
assessment has to be made with reference to
the law which is in existence at the relevant
time. The mere fact that the assessments in
question has somehow remained pending on April 1,
1979, cannot be cogent reason to make the
Explanation applicable to the cases of the present
assessees. This fortuitous circumstance cannot take
away the vested rights of the assessees at hand. We
are therefore of the view that the Tribunal erred in
law in placing reliance on the Explanation to hold
that the salaries earned by the assessees would be
taxable in India.‖
6.19. In Reliance Industries Ltd. Vrs. Commissioner of Sales
Tax, AIR 2020 Ori 55, it has been held by this Court
that:
―9. The case law of the Constitutional Bench, which is
sought to be relied upon by the learned counsel for
the petitioner in the case of Zile Singh Vrs. State of
Haryana reported in (2004) 8 SCC 1 to interpret the
effect of the word ‗substituted' was to be given effect
to retrospectively, failing which it would take away
the fundamental right which was conferred.
10. But in our considered opinion, in a tax statute, the
word ‗substitute' is to be interpreted strictly as per
the legislative intention. It cannot be given the
retrospective effect unless expressly provided
or intention to that effect is manifest from a
bare reading of the provision. If an ordinary
interpretation is made as per the case law relied by
the petitioner, then if any tax is increased, it cannot
be realized retrospectively, which can never be the
intention of such ‗substitution'. Therefore,
amending provision will have prospective
effect.
11. In that view of the matter, every word in a tax
statute should be interpreted strictly as it stood on
the date the taxing event exists or it occurs. Thus,
the argument canvassed by the learned counsel for
the petitioner is devoid of any merit, is required to be
rejected and is rejected.‖
6.20. To fortify that the amendment to the OET Act as referred
to above operates prospectively a reference to Bansapani
Iron Ltd. Vrs. State of Odisha, 2016 (I) ILR-CUT 50 would
suffice. In the said case it has been succinctly held as
follows:
―11. *** In the present case, the facts of the present case
is distinct, inasmuch as, the Orissa Value Added
Tax (Amendment) Act, 2007 did not itself declare the
date from which the statute came into operation and
left it to the Government to issue the appointed date
through notification. The notification was issued
thereafter indicating 1st day of June, 2008 as
the appointed date.
We are of the considered view that, the same
cannot be any clearer indication of legislative
intent other than the notification notifying the
appointed date, from which the Act would
come into operation. Apart from the above, we are
also of the view that in the judgment cited at the Bar
by the petitioner in the case of Punjab Traders, AIR
1990 SC 2300, honourable the Supreme Court
clearly came to a conclusion that ‗the said
amendment was clarificatory, since it was always
well understood in trade that khandsari sugar was
also sugar'. In the present case, prior to 2008
amendment to the OVAT Act, spare parts were dealt
separately other than capital goods. It is only on and
from the date, on which spare parts became covered
under the term ‗capital goods' with the 2008
amendment came into force, that the situation stood
otherwise and this amounted to a substantiate
change insofar as taxability of a transaction is
concerned.‖
6.21. Having regard to such unambiguous enunciation of law,
the Odisha Entry Tax (Amendment) Act, 2012, having
substituted the words ―within a period of seven years‖
with effect from 01.07.2012 by appointing the date of
effect of said amendment Act, with respect to period in
question, the service of Notice in Form E-32 was
required to be served on the dealer ―within five years‖
from the end of the year to which the tax period relates.
As the end of the year relatable to the tax periods from
01.04.2005 to 28.02.2006 is 31.03.2006, the notice
ought to have been served on the petitioner on or before
31.03.2011. Since the subject-Notice in Form E-32 is
served in the year 2023, the reassessment under sub-
section (1) and sub-section (2) of Section 10 vide Order
dated 12.07.2024 is barred by limitation.
6.22. From the aforesaid discussions looking from any angle,
taking into account either pre-amendment or post
amendment, it is quite obvious that on the date of
initiation of proceeding for reassessment under sub-
section (1) of Section 10 by issue of Notice in Form E-32,
dated 08.09.2023 has been rendered time-barred.
7. In view of the analysis made in the foregoing paragraphs,
having thus perceived that the reassessment framed
pursuant to the Notices vide Annexures-6 and 7 does
not fall within the purview of Section 10(1)/(2), being hit
by limitation enshrined therein, the scrutiny of such
notices take this Court to ponder upon another facet.
7.1. A cursory glance at provisions contained in sub-section
(1), sub-section (2) and sub-section (3) of Section 10 of
the OET Act would indicate that while sub-sections (1)
and (2) are intertwined leading to indicate one
contingency, sub-section (3) thereof comprehends
different circumstance. Whereas sub-section (1) and
sub-section (2) spell out that notice for reassessment
shall be triggered where all or any of the scheduled
goods brought by a dealer has escaped assessment of
tax, or where value of all or any of the scheduled goods
has been under-assessed, or any deduction has been
allowed wrongly, the Assessing Authority, may within a
period of seven (five, pre-amendment) years from the end
of the year to which the tax period relates, serve a notice
on the dealer in Form E-32 in terms of Rule 15D of the
OET Rules and on determination of tax liability under
such circumstance enumerated in sub-section (1), in
addition to raising demand of tax, the dealer may be
imposed with the penalty as specified thereon. However,
on careful reading of sub-section (3) of Section 10, it
would show that it is not dependent neither on sub-
section (1) or sub-section (2). Looking at Notice in Form
E-32, dated 24.04.2023 (Annexure-6), it is apparent that
the Assessing Authority cited reason for exercise of
jurisdiction for reassessment as:
―the order passed earlier is found to be erroneous or
prejudicial to the interest of revenue consequent to, or in
the light of following judgment(s) of the Hon'ble Orissa
High Court in case of Bhusan Power and Steel Ltd. Vrs.
State of Orissa and others reported in (2012) 47 VST 466
and First Appeal Order No.CUII-AA-15/2006-07 dated
16.07.2019 passed by the Additional Commissioner of
Sales Tax (Appeal), Commissionerate of CT and GST,
Odisha, at Cuttack.‖
7.2. However, as contended in paragraph 7 of the counter
affidavit, the opposite parties clearly accepted that the
case does not fall within scope of sub-section (3) of
Section 10, as such the said reason has been given a go-
bye by issue of subsequent Notice in Form E-32, dated
08.09.2023 (Annexure-8).
7.3. The Order of Assessment dated 12.07.2024 (Annexure-9)
contains the following:
―*** The dealer-company has not paid the tax due to
Government on Custom Duty amounting to
Rs.61,20,55,171.00. Further, the dealer-company has
paid Entry Tax @ 0.5% on furnace oil instead of @ 1% on
an amount of Rs.3,89,16,072.00. The tax component of
both these items works out to Rs.32,54,856.21. As the
dealer-company has not paid the tax due which is
required to be paid under Law, the dealer-company
Is visited with penalty of Rs.65,09,712.42 as per
provisions of sub-section (2) of Section 10 of the OET
Act. Tax together with penalty works out to
Rs.7,71,31,963.31. The dealer-company has already paid
an amount of Rs.6,55,79,139.00 along with the returns
filed. Further the dealer has paid Rs.3,96,567.00 vide
PGR No.30 dated 30.10.2006. Balance tax and penalty
payable Rs.1,11,56,257.00 which was adjusted against
the refund for the period 1992-93 under GST Act vide
refund adjustment order No.l393/CT dt.28.03.2007.
Further due to less payment of Entry Tax during the filing
of returns, interest under Section 7(5) of the OET Act has
been levied to the tune of Rs.12,14,133.00 which the
dealer is now required to pay. Hence, the interest of
Rs.12,14,133.00 is payable by the dealer-company for the
period 01.04.2005 to 28.02.2005 under Entry Tax Act,
1999 as per the terms and conditions of the demand
notice enclosed.‖
7.4. Imposition of penalty under sub-section (2) of Section 10
of the OET Act in the impugned Assessment Order
would unequivocally leads to this Court to construe that
the Assessing Authority has exercised power under sub-
section (1) of Section 10; obviously not under sub-
section (3).
7.5. The above concluding paragraphs contained in the
impugned order of assessment clearly demonstrates that
the JCST got confused and failed to act according to the
authority conferred under the statute. This Court is
reminded of dicta of the Hon'ble Supreme Court of India
reiterated quite often. In Babu Verghese Vrs. Bar Council
of Kerala, (1999) 3 SCC 422 it is stated that:
―31. It is the basic principle of law long settled that if the
manner of doing a particular act is prescribed under
any statute, the act must be done in that manner or
not at all. The origin of this rule is traceable to the
decision in Taylor Vrs. Taylor, (1875) 1 Ch D 426 =
45 LJCh 373 which was followed by Lord Roche in
Nazir Ahmad Vrs. King Emperor, (1936) 63 IA 372 =
AIR 1936 PC 253 who stated as under:
‗[W]here a power is given to do a certain thing in a
certain way, the thing must be done in that way or
not at all.'
32. This rule has since been approved by this Court in
Rao Shiv Bahadur Singh Vrs. State of A.P., AIR 1954
SC 322 = 1954 SCR 1098 and again in Deep Chand
Vrs. State of Rajasthan, AIR 1961 SC 1527 = (1962)
1 SCR 662. These cases were considered by a three-
Judge Bench of this Court in State of U.P. Vrs.
Singhara Singh, AIR 1964 SC 358 = (1964) 1 SCWR
57 and the rule laid down in Nazir Ahmad case,
(1936) 63 IA 372 = AIR 1936 PC 253 was again
upheld. This rule has since been applied to the
exercise of jurisdiction by courts and has also been
recognised as a salutary principle of administrative
law.‖
7.6. While first notice in Annexure-6 indicates that the
exercise of power to proceed with reassessment was
made after the petitioner has been ―assessed under
Section 9C of the Odisha Entry Tax Act, 1999 for the tax
periods 01.04.2005 to 28.02.2006 on 02.08.2006‖, the
subsequent notice in Annexure-8 would indicate that the
power was exercise by stating that ―You have been
assessed under Section 9 of the Odisha Entry Tax Act,
1999, for the tax periods 01.04.2005 to 28.02.2006 on .....
(left blank; no date is given) and communicated to that
effect have been made on 31.03.2023‖. The Assessing
Authority is unsure of particular date(s) when the self-
assessment returns furnished in terms of Section 9 read
with Section 7 and Rule 10 were accepted. Even
assuming that a communication is made indicating
acceptance of self-assessment returns on 31.03.2023
(Annexure-4), nothing is evinced from the record much
less the counter affidavit assigning the reason as to why
there was such inordinate delay in communicating the
result of self-assessment returns filed way back during
the year 2005-06, particularly so when the Audit
Assessment Order dated 02.08.2006 (Annexure-1) got
set aside in the Appeal filed at the behest of the
petitioner vide Appellate Order dated 16.07.2019
(Annexure-2).
7.7. This Court in L.D. Modern Rice Mills Vrs. Commissioner of
Commercial Taxes, Government of Odisha & Others,
STREV No.10 of 2020, vide Order dated 09.01.2023
clarified the effect of non-communication of order of
acceptance of self-assessment in the following manner:
―1. Admit.
2. The following question of law is framed:
‗(a) Whether exercise of power under Section 43 of
the OVAT Act without resorting to the statutory
provision of Section 39, 40, 42 and 44 in terms
of Rule 50 of the OVAT Rules, 2005 is justified?
(b) Whether the learned Tribunal was justified in
interfering with the order of Appellate
Authority?;
(c) Whether the learned Tribunal was justified in
passing an order in so far as penalty under
Section 43(2) is concerned?‖
3. As far as the above questions are concerned, the
factual position is not in dispute that the original
assessment was only a self-assessment without
that being any communication of the acceptance of
such self-assessment by the Department to the
Assessee.
4. In that view of the matter, following the judgment of
this Court dated 1st December, 2021 in STREV
No.64 of 2016 (M/s. Keshab Automobiles Vrs. State
of Odisha)9, as been affirmed by the Supreme Court
of India in its order dated 13th July, 2022 in SLP
(Civil) No.9912 of 2022 (Deputy Commissioner of
Sales Tax Vrs. Rathi Steel and Power Ltd., the
questions of law framed are answered in the
negative i.e. in favour of the Assessee and against
the Department. The impugned order of the Odisha
Sales Tax Tribunal, and the corresponding orders of
the First Appellate Authority and the Assessing
Officer are, accordingly, set aside.
5. The STREV is disposed of in the above terms.‖
7.8. This Court in yet another case being Vishnu Chemicals
Ltd. Vrs. State of Odisha, 2024 ILR-CUT-ONLINE 3096
made the following pertinent observation with respect to
requirement of communication of acceptance of self-
assessment returns and effect of non-communication
thereof:
―6. We admit the revision petition on the question of law
formulated as below. For self-assessment made and
filed prior to 1st October, 2015, which did not receive
formal communication or acknowledgement from the
9 The interpretation of legal perspective in Keshab Automobiles Vrs. State of
Odisha, 2021 SCC OnLine Ori 2471 rendered in the context of the Odisha Value
Added Tax Act, 2004, has been applied in ECMAS Resins Pvt. Ltd. Vrs. State of
Odisha, 2022 (II) ILR-CUT 817, which is a case under the Odisha Entry Tax Act,
1999.
department as accepted and there was reopening
and reassessment under Section 43(1), can the self-
assessment be said to have been accepted?
***
9. It appears to us there cannot be deemed acceptance
of self-assessment prior to 1st October, 2015 per
view taken in M/s. Keshab Automobiles (supra)
[2021 SCC OnLine Ori 2471]. On query made Mr.
Rath submits, revenue preferred special leave
petition to the Supreme Court. By Order dated 13th
July, 2022 the Supreme Court, in Special Leave to
Appeal (C) No. 9912 of 2022 10 and several
applications made therein, recorded complete
agreement with the view. Reproduced below is text
of order dated 13th July, 2022 (supra).
‗We have gone through the impugned order(s)
passed by the High Court. The High Court has
passed the impugned order(s) on the interpretation
of relevant provisions, more particularly Section
43(1) of the Odisha Value Added Tax Act, 2004,
which was prevailing prior to the amendment. We
are in complete agreement with the view taken by
the High Court. No interference of this Court is called
for in exercise of powers under Article 136 of the
Constitution of India. Hence, the Special Leave
Petitions stands dismissed.
Pending application(s) shall stand disposed of.'
10. We are clear our mind, view taken by coordinate
Bench received confirmation from the Supreme
Court. The view was, prior to 1st October, 2015
10 Deputy Commissioner of Sales Tax Vrs. Rathi Steel and Popwer Ltd., Special
Leave to Appeal (C) No. 9912 of 2022, vide Order dated 13.07.2022.
there had to be formal communication or an
acknowledgment by the department that the self-
assessment stood ‗accepted' for there to be
reopening under Section 43(1). In this case there is
no dispute that such acceptance was neither
communicated nor made known as acknowledged
by the Department.‖
7.9. Stemming on such exposition of law, having glance at
the Notice in Form E-32, dated 24.04.2023 it would
reveal that at the time exercise of power to reassess the
petitioner under Section 10, the acceptance of self-
assessment returns furnished during 2005-06 was not
communicated. The purported communication of such
fact of acceptance by Letter dated 31.03.2023 of the
JCST is inappropriate exercise of authority/power
conferred under the statute. Had the communication of
such fact been made prior to exercise of power under
Section 10, the same ought to have found place explicitly
in the Notice in Annexure-6. The counter affidavit is
silent about the reason for such a delay in
communication. The subsequent Notice dated
08.09.2023 (Annexure-8) depicting communication being
made is an attempt to masquerade so as to bring the
petitioner into the clutches of reassessment, despite the
fact that by the date the Appellate Authority held that
the very exercise of power to assess under Section 9C is
vitiated for want of jurisdiction.
7.10. A significant variation is perceived between the two
notices. Statutory Notice dated 24.04.2023 was issued
with reason that the ―order passed earlier is found to be
erroneous or prejudicial to the interest of revenue
consequent to or in the light of following judgment(s) of
the Hon'ble Orissa High Court in case of Bhusan Power
and Steel Ltd. Vrs. State of Odisha and others reported in
(2012) 47 VST 466 and First Appeal Order No.CU-II-
AA15/2006-07, dated 16.07.2019 passed by the
Additional Commissioner of Sales Tax (Appeal),
Commissioner of CT and GST, Odisha at Cuttack‖.
7.11. Both the cases are referred to in the said Notice in
Annexure-6 for initiation of proceeding for reassessment
are purported to have exercised jurisdiction under sub-
section (3) of Section 10. In the first place the ratio of
Bhusan Power and Steel Ltd. Vrs. State of Odisha and
others reported in (2012) 47 VST 466 is not applicable to
the present case. Distinctive feature of this case is that
while making Audit Assessment based on Audit Visit
Report, the Assessing Authority could not have utilised
any material against the assessee other than the
materials available in the Audit Visit Report. In Bhusan
Power and Steel Ltd. (supra) the Assessing Authority
while making Audit Assessment utilised the material
regarding escaped turnover. Therefore, under such
premise, as the Assessing Authority had already issued
notice for Audit Assessment and also separately for
Reassessment within the periods specified under the
statute, this Court directed as follows:
―21. In view of the above legal position and our
observations made hereinabove supra, we set aside
the impugned order of assessment dated September
22, 2011 passed for the period from July 6, 2006 to
March 31, 2009 with a direction to the assessing
authority to pass the audit assessment order afresh
exclusively on the basis of audit visit report within a
period of four weeks from the date of appearance of
the petitioner-dealer before him for this purpose
which is fixed to December 20, 2011. If the
petitioner-dealer is aggrieved of the audit
assessment order it may prefer statutory appeal. On
the date of appearance of the petitioner on December
20, 2011, the assessing authority shall serve notice
on the petitioner-dealer in the prescribed form for the
purpose of making assessment under Rule 12(4) of
the CST (O) Rules [i.e., Reassessment]. Needless to
mention that the assessing authority shall complete
the assessment under Rule 12(4) of the CST (O)
Rules after affording reasonable opportunity of
hearing to the petitioner- dealer and shall examine
the petitioner's claim of branch transfer keeping in
mind the judgment of the honourable Supreme Court
in Tata Engineering and Locomotive Co. Ltd. [1970]
26 STC 354 (SC).‖
In the present case, the Appellate Authority set aside the
Order of Audit Assessment, which was founded solely on
Intelligence Report but not Audit Visit Report, for lack of
jurisdiction. The Assessing Authority thereafter sought
to initiate proceeding for reassessment invoking power
under Section 10(3) of the OET Act. This Court having
held in Indian Oil Adani Ventures Limited Vrs. State of
Odisha, 2025 SCC OnLine Ori 4024 that Order of the
Appellate Authority cannot be comprehended within the
meaning of ―Order of any Court or Tribunal‖, the reason
stated in Notice in Form E-32, dated 24.04.2023
(Annexure-6) cannot be held to be valid. Nonetheless, it
is made clear by the opposite parties in the counter
affidavit that the impugned reassessment is not under
Section 10(3). Therefore, the issue of such notice dated
24.04.2023 (Annexure-6) by the Assessing Authority
assuming jurisdiction to proceed with the assessment
under sub-section (3) of Section 10 can be faulted with.
7.12. For another reason the Notice in Annexure-6 cannot
clothe the Assessing Authority with power to proceed
with the Assessment under Section 10. The Assessing
Authority on 08.09.2023 issued another Notice in Form
E-32 (Annexure-8). In said subsequent Notice there is no
mention about Bhusan Power and Steel Ltd. Vrs. State of
Odisha and others reported in (2012) 47 VST 466 and
First Appeal Order No.CU-II-AA15/2006-07, dated
16.07.2019 passed by the Additional Commissioner of
Sales Tax (Appeal), Commissioner of CT and GST,
Odisha at Cuttack. Paragraph No.4(iv) of said notice in
Annexure-8 is left blank; however, a new fact that ―You
have been assessed under Section 9 of the Orissa Entry
Tax Act, 1999 for the tax period(s) 01.04.2005 to
28.02.2006 on ______ (left blank) and communicated to
that effect have been made on 31.03.2023‖ has been
incorporated. As both the statutory notices cannot co-
exist for reassessment on the same subject-matter, it is
unambiguous that the proceeding initiated under sub-
section (3) of Section 10 in pursuance of earlier Notice in
Form E-32, dated 24.04.2023 (Annexure-6) was
abandoned, and in its place a fresh Notice in Form E-32,
dated 08.09.2023 (Annexure-8) was issued. The tenor of
Paragraph No.4 in said Notice at Annexure-8 would
demonstrate that after acceptance of self-assessment
returns the reassessment proceeding under Section
10(1) was instituted. As has already been discussed in
the foregoing paragraphs that the Notice dated
08.09.2023 ex facie issued beyond period of limitation
prescribed under sub-section (1) of Section 10, the
Assessing Authority had no jurisdiction to proceed with
such reassessment and therefore, the Order of
Assessment dated 12.07.2024 is liable to be quashed.
7.13. When the Notices issued under Section 10 for the
purpose of reassessment are found to be without any
sanction of law, the consequential orders thereof cannot
be countenanced. Further, the Appellate Authority while
allowing the appeal filed at the behest of the petitioner
directed for initiation of ―proper proceedings strictly in
accordance with the provisions of the OET Act and Rules
framed thereunder‖. The Notices under Annexures-6 and
8 are found not to be in consonance with the provisions
contained in the OET Act or the OET Rules.
7.14. It is trite that once the basis of a proceeding is gone, all
the consequential acts, actions and orders would fall to
the ground automatically. This principle is not only
applicable to the judicial proceedings, but also to the
quasi judicial proceedings and equally to the
administrative orders too. [See, Badrinath Vrs. State of
Tamil Nadu, (2000) 8 SCC 395; Kalabharati Advertising
Vrs. Hemant Vimalnath Narichania, (2010) 10 SCR 971].
8. A fallacious ground of the opposite parties diagonally
contrary than what has been contained in the statutory
Notice in Form E-32 deserves discussion.
8.1. In the counter affidavit a stand is taken in paragraph 7
as follows:
―That it is humbly submitted that in this context, Section
49(2) of the OVAT Act becomes relevant and applicable as
it specifically deals with the situation where any Court or
Tribunal passes an order in appeal or revision to the effect
that any tax assessed should have been assessed under
the provision of a law other than that under which it was
assessed. The present reassessment squarely falls within
the ambit of this provision and, therefore, the period of
limitation applicable to the present reassessment
proceeding is not the one under Section 10(3) of the OET
Act but the one under Section 49(2) of the OVAT Act read
with Rule 3411 of the OET Rules.‖
8.2. Taking a new stance than what is reflected in the Notice
indicating exercise of jurisdiction to initiate proceeding
under Section 10 of the OET Act, by way of filing counter
affidavit the case of the opposite parties cannot be
improved. In Mohinder Singh Gill Vrs. Election
Commissioner, (1978) 1 SCC 405 it has been succinctly
held,
―8. The second equally relevant matter is that when a
statutory functionary makes an order based on
certain grounds, its validity must be judged by the
reasons so mentioned and cannot be supplemented
by fresh reasons in the shape of affidavit or
otherwise. Otherwise, an order bad in the
beginning may, by the time it comes to court on
account of a challenge, get validated by
additional grounds later brought out. We may
here draw attention to the observations of Bose, J. in
Commr. of Police, Bombay Vrs. Gordhandas Bhanji,
1951 SCC 1088 : AIR 1952 SC 16:
‗Public orders, publicly made, in exercise of a
statutory authority cannot be construed in the light
of explanations subsequently given by the officer
making the order of what he meant, or of what was
in his mind, or what he intended to do. Public orders
11 Rule 34 of the OET Rules stood thus:
―34. Implementation.--
For any other matters specified under these rules but required for the
carrying out the purposes of the Act and these Rules, the provision under
VAT Act and Rules made thereunder shall, mutatis mutandis, apply.‖
made by public authorities are meant to have public
effect and are intended to affect the actings and
conduct of those to whom they are addressed and
must be construed objectively with reference to the
language used in the order itself.'
Orders are not like old wine becoming better as they
grow older.‖
8.3. It can aptly be stated that the opponent cannot be taken
by surprise by way of setting up pleading for the first
time which was never the context before the Authority
concerned while exercising power to proceed with
reassessment. In this connection the following
observations in Shiv Prasad Sahu Vrs. State of Orissa,
(2009) 19 VST 417 (Ori) may be pertinent to be taken
note of:
―27. To deal with the third question it is necessary to
refer the grounds of appeal filed before the learned
Tribunal by the Revenue. The ground of appeal
which has been annexed to the petition as annexure
4 does not reveal that any specific ground has been
taken with regard to addition of 10 per cent towards
driage and wastage made by the assessing officer
and deleted by the first appellate authority. By a
cryptic order the Tribunal has restored the order of
assessment. The order does not reveal whether any
argument has been advanced by the Revenue
against deletion of addition 10 per cent of purchased
quantity of mohua flowers by the first appellate
authority. Needless to say that the Tribunal is under
a duty to decide all the questions of facts and law
raised in the appeal before it. However, Tribunal
on its own cannot make out a new case
particularly when no such point was taken in
ground of appeal and argued before it. It is not
possible for the court, to decide an issue, not
raised/agitated by the authority for the reason
that other party did not have opportunity to
meet it and such a course would violate the
principles of natural justice. (Vide New Delhi
Municipal Committee Vrs. State of Punjab AIR 1997
SC 2847). Similarly, in V. K. Majotra Vrs. Union of
India, (2003) 8 SCC 40, the apex court held as
under:
‗*** The writ courts would be well advised to decide
the petitions on the points raised in the petition and
if in a rare case, keeping in view the facts and
circumstances of the case, any additional points are
to be raised then the concerned and affected parties
should be put to notice on the additional points to
satisfy the principles of natural justice. Parties
cannot be taken by surprise. ***'
28. As no such ground was taken by the Revenue before
the Tribunal, the question of deciding the issues
could not arise. Therefore, findings on the issue
cannot be sustained in the eyes of law.‖
8.4. It is well established that any order if passed beyond the
terms of show-cause notice is bad in law and untenable.
In Kalpataru Power Transmission Ltd. Vrs. State of
Maharashtra, (2023) 119 GSTR 147 (Bom) it has been
stated thus:
―10. *** The Supreme Court in case of Commissioner of
Customs, Mumbai Vrs. Toyo Engineering India Ltd.,
(2006) 7 SCC 592 noted that the Department
cannot be allowed travel beyond the show-
cause notice. The Supreme Court further observed
that it would be against the principles of natural
justice that a person who has not been confronted
with any ground is saddled with liability thereof and
since the issue did not form the basis of the show-
cause notice and was not even confronted to the
order passed beyond show-cause notice is to be
quashed.
11. The Supreme Court in case of Commissioner of
Central Excise, Nagpur Vrs. Ballarpur Industries
Ltd., (2007) 8 SCC 89 observed that if Rule 7 of
the Central Excise (Valuation) Rules, 1975 have
not been invoked in the show-cause notice, it
would not be open to the Commissioner to
invoke the said rule in the remand
proceedings. The view expressed by the Supreme
Court in cases of Commissioner of Customs, Mumbai
Vrs. Toyo Engineering India Ltd. (supra) and
Commissioner of Central Excise, Nagpur Vrs.
Ballarpur Industries Ltd. (supra) was applied in
subsequent decisions of the Supreme Court in case
of Commissioner of Central Excise, Bhubaneswar-1
Vrs. Champdany Industries Ltd., (2009) 9 SCC 466
and also in the case of Commissioner of Central
Excise Vrs. Gas Authority of India Limited, (2007) 15
SCC 91. Therefore, in our view, applying the ratio of
the Supreme Court referred to hereinabove, the
impugned order disallowing all the deductions under
Rule 58(1)(a) to (h) without giving any show-cause
notice to the petitioner would be rendered bad in
law.‖
8.5. With such lucid legal exposition, for the reasons
mentioned in the foregoing paragraphs, the stand taken
by the opposite parties deserves to be repelled.
8.6. This apart, Rule 34 of the OET Rules is inapplicable in
the present context inasmuch as specific provision for
reassessment has been spelt out under Section 10 of the
OET Act read with Rule 15D of the OET Rules. Rule 34
of the OET Rules makes it abundantly clear that for any
other matters not specified under the OET Rules but
required for the carrying out the purposes of the Act and
the Rules, the provisions of the OVAT Act and the Rules
made thereunder shall mutatis mutandis apply.
8.7. The expression ―for carrying out the purpose of the Act‖
has been explained in Global Energy Ltd. Vrs. CERC,
(2009) 15 SCC 570 as follows:
―25. It is now a well-settled principle of law that the rule-
making power ―for carrying out the purpose of the
Act‖ is a general delegation. Such a general
delegation may not be held to be laying down any
guidelines. Thus, by reason of such a provision
alone, the regulation-making power cannot be
exercised so as to bring into existence substantive
rights or obligations or disabilities which are not
contemplated in terms of the provisions of the said
Act.
26. We may, in this connection refer to a decision of this
Court in Kunj Behari Lal Butail Vrs. State of H.P.,
(2000) 3 SCC 40 wherein a three-Judge Bench of
this Court held as under:
‗14. We are also of the opinion that a
delegated power to legislate by making
rules 'for carrying out the purposes of the
Act' is a general delegation without laying
down any guidelines; it cannot be so
exercised as to bring into existence
substantive rights or obligations or
disabilities not contemplated by the
provisions of the Act itself.'
[See also State of Kerala Vrs. Unni, (2007) 2
SCC 365 (SCC paras 32 to 37) and A.P.
Electricity Regulatory Commission Vrs. R.V.K.
Energy (P) Ltd., (2008) 17 SCC 769].
27. The power of the regulation-making authority, thus,
must be interpreted keeping in view the provisions of
the Act. The Act is silent as regards conditions for
grant of licence. It does not lay down any pre-
qualifications therefor. Provisions for imposition of
general conditions of licence or conditions laying
down the pre-qualifications therefor and/or the
conditions/qualifications for grant or revocation of
licence, in absence of such a clear provision may be
held to be laying down guidelines by necessary
implication providing for conditions/qualifications for
grant of licence also.‖
8.8. The expression ―mutatis mutandis‖ used in Rule 34 is of
significance. In Rajasthan State Industrial Development
and Investment Corporation Vrs. Diamond & Gem
Development Corporation Limited, (2013) 5 SCC 470 the
meaning of mutatis mutandis has been given as under:
―17. In Ashok Service Centre Vrs. State of Odisha, AIR
1983 SC 394 = (1983) 2 SCC 82, this court held as
under (SCC p.93, paragraph 17):
‗17. *** Earl Jowitt's The Dictionary of English Law
1959) defines ‗mutatis mutandis' as ‗with the
necessary changes in points of detail'. Black's
Law Dictionary (Revised 4th Edn. 1968)
defines ‗mutatis mutandis' as ‗with the
necessary changes in points of detail, meaning
that matters or things are generally the same,
but to be altered when necessary, as to names,
offices, and the like' *** Extension of an earlier
Act mutatis mutandis to a later Act, brings in
the idea of adaptation, but so far only as it is
necessary for the purpose, making a change
without altering the essential nature of the
things changed, subject of course to express
provisions made in the later Act *** In the
circumstances the conclusion reached by the
High Court that the two Acts were independent
of each other was wrong. We are of the view
that, it is necessary to read and to construe the
two Acts together as if the two Acts are one,
and while doing so to give effect to the
provisions of the Act which is a later one in
preference to the provisions of the Principal Act
wherever the Act has manifested an intention
to modify the Principal Act.'
Similarly, in Prahlad Sharma Vrs. State of U.P.,
(2004) 4 SCC 113, the phrase ‗mutatis mutandis'
has been explained as under:
‗11. The expression ‗mutatis mutandis' itself
implies applicability of any provision with
necessary changes in points of detail'.
[See also: Mariyappa Vrs. State of Karnataka, AIR
1998 SC 1334 = (1998) 3 SCC 276; and Janba Vrs.
Gopikabai, AIR 2000 SC 1771 = (2000) 4 SCC 1].
18. Thus, the phrase ‗mutatis mutandis' implies that a
provision contained in other part of the statute or
other statutes would have application as it is with
certain changes in points of detail.‖
8.9. In Corporation of Calcutta Vrs. Sirajuddin, AIR 1957 Cal
399, the expression ‗mutatis mutandis' has been
explained as follows:
―When a law directs that a provision made for a certain
type of case shall apply mutatis mutandis in another type
of case, it means that it shall apply with such changes as
may be necessary, but not that even if no change be
necessary, some change shall nevertheless be made.‖
8.10. In Vasudev Anant Kulkarni Vrs. Executive Engineer,
Maharashtra State Electricity Board, Rural Division,
Ahmednagar, 1994 SCC OnLine Bom 12, the term
―mutatis mutandis' has been explained as follows:
―The meaning attached to expression ‗mutatis mutandis'
is, ‗when a law directs that a provision made for a certain
type of case shall apply mutatis mutandis in another type
of case, it means that it shall apply with such changes as
may be necessary but not that even if no change be
necessary, some change shall nevertheless be made...' It
is an established principle that the same words or
phrases, when used in Acts dealing with the same subject
matter often bear the same meaning. So also, where a
word has been constructed judicially in a certain legal
area, it is we think, right to give it the same meaning if it
occurs in a statute, dealing with the same general subject
matter unless that the word must have a different
construction.‖
8.11. The expression ‗mutatis mutandis', an adverbial phrase
qualifying the verb ―shall ... apply‖ would suggest ―those
changes being made which must be made‖. This can
mean only that the changes to be made must have
reference to the proceedings to which the provision has
to be applied and not to the particular clause under
which the particular proceeding may be instituted.
8.12. It is also of importance to notice the words ―for any other
matters not specified‖ employed in Rule 34 of the OET
Rules. Such expression read juxtaposed with ―mutatis
mutandis‖ can only mean that in case the provisions of
the OET Rules are silent about ―any other matters‖ than
what are specifically found mentioned, in such event the
provisions of the OVAT Act and the Rules framed
thereunder could be made applicable. Stemming on the
principle laid down by the Hon'ble Supreme Court
referred to supra that a delegated power to legislate by
making Rules ‗for carrying out the purposes of the Act' is
a general delegation without laying down any guidelines;
it cannot be so exercised as to bring into existence
substantive rights or obligations or disabilities not
contemplated by the provisions of the Act itself, looking
at the present matter in the said perspective, it can be
stated that when specific substantive provisions are
available for the Assessing Authority to undertake
reassessment under Section 10 of the OET Act and
corresponding Rules, particularly Rule 15D of the OET
Rules, laid down the procedure to exercise such power
conferred under Section 10, there is no scope or
occasion for the Authority to invoke Rule 34 of the OET
Rules.
8.13. In the present case, the provisions of Rule 34 of the OET
Rules read with Section 49(2) of the OVAT Act cannot be
imported inasmuch as the circumstances for which
reassessment can be made under the OET Act has been
specifically laid down and such provisions being
jurisdictional fact and substantive in nature, the scope
of adhering to Section 49(2) of the OVAT Act for the
purpose of reassessment under Section 10 of the OET
Act is inapplicable. Therefore, importing provision like
Section 49(2) of the OVAT Act for the purpose of
reassessment under Section 10 of the OET Act is
inappropriate and irrational approach. The suggestion
made by way of counter affidavit by the Revenue is liable
to be repelled.
8.14. It is candidly admitted by the Revenue in paragraph 7 of
the counter affidavit that the present case is not covered
under Section 10(3) of the OET Act. Bare reading of
Section 10 reveals two situations, viz., one under sub-
section (1) and another is sub-section (3). Since in the
subsequent Notice in Form E-32 dated 08.09.2023
(Annexure-8) the reason that the initiation of
reassessment was on account of Bhusan Power and Steel
Ltd. (2012) 47 VST 466 (Ori) and for Appellate Order
having set aside the Audit Assessment under Section 9C
as contained in Notice in Form E-32 dated 24.04.2023
(Annexure-6) is conspicuously absent and consciously
omitted, it is obvious that the reassessment is made for
the circumstances contained in sub-section (1) of
Section 10 of the OET Act.
8.15. It is firm stand of the Revenue that the case falls within
the ambit of Section 49(2) of the OVAT Act, but not
Section 10(3) of the OET Act. When specific substantive
provision for reassessment is provided under sub-
section (3) of Section 10 of the OET Act, Section 49(2)12
12 Section 49(2) of the OVAT Act stood thus:
―(2) Where any Court or Tribunal passes an order in appeal or revision to the
effect that any tax assessed under this Act or the Central Sales Tax Act,
1956 (74 of 1956) should have been assessed under the provision of a
law other than that under which it was assessed, then, in consequence of
such order or to give effect to the finding or direction contained in such
of the OVAT Act cannot be made applicable to the
present context. It is held in Indian Oil Adani Ventures
Limited Vrs. State of Odisha, 2025 SCC OnLine Ori 4024
that the purport of sub-section (2) of Section 49 of the
OVAT Act is that if the transactions of inter-State nature
(attracting purview of the Central Sales Tax Act, 1956)
are taxed as intra-State transactions amenable to be
taxed under the OVAT Act, but subsequently such
transactions were found to be inter-State transactions in
the view of the final-fact finding by the authority, i.e.,
Sales Tax Tribunal in appeal under Section 78 of the
OVAT Act or interpretation on legal issue answered by
the High Court in revision under Section 80 of the OVAT
Act, the same can be corrected invoking provisions of
sub-section (2) of Section 49 of the OVAT Act by
exercising same or identical power conferred under the
Central Sales Tax Act, 1956 and the converse can also
be true. However, such is not true for the purpose of
OET Act.
8.16. It has already been held in the foregoing paragraphs that
issue of subsequent fresh Notice in Form E-32, dated
08.09.2023 (Annexure-8) by omitting the circumstances
for which sub-section (3) of Section 10 of the OET Act
order, the turnover or any part thereof as relates to such assessment may
be assessed or reassessed, as the case may be, to tax at any time within
five years from the date of such order, notwithstanding the applicability of
any period of limitation to such assessment or reassessment under this
Act.‖
envisaged makes it abundantly manifest that the
Assessing Authority consciously abandoned the
proceeding for reassessment under sub-section (3) of
Section 10 initiated by dint of Notice in Form E-32,
dated 24.04.2023 (Annexure-6).
8.17. For the reasons ascribed hereinabove, the contention of
the Revenue is illogical, irrational and without any
substance.
Conclusion:
9. It emerges from the above discussions that:
i. The Intelligence Report being utilised in the course
of Audit Assessment under Section 9C treating the
said report to be Audit Visit Report is contrary to
what is laid down in Bhusan Power and Steel Ltd.
Vrs. State of Odisha and Others, reported in (2012)
47 VST 466 (Ori).
ii. The Appellate Authority having set aside the Audit
Assessment in the light of said judgment in Bhusan
Power and Steel Ltd. Vrs. State of Odisha and
Others, reported in (2012) 47 VST 466 (Ori) directed
for taking out appropriate proceeding in accordance
with law, which obviously would mean
reassessment under Section 10 of the OET Act.
iii. The imposition of penalty invoking sub-section (2)
of Section 10 of the OET Act in the Assessment
dated 12.07.2024 would suggest that the Assessing
Authority had exercised power under Section 10(1),
but not under sub-section (3) thereto. This aspect
is made clear by the stance taken by the opposite
parties in their counter affidavit. As by the date the
Notice in Form E-32 prescribed under Rule 15D for
the purpose of reassessment under Section 10
(Annexure-6) was issued on 24.04.2023 five years,
or seven years as amended, from the end of the
year to the tax period(s) expired, the provisions of
Section 10(1) could not have been invoked.
iv. In view of Indian Oil Adani Ventures Limited Vrs.
State of Odisha, 2025 SCC OnLine Ori 4024 since
Appellate Order cannot be comprehended within
the meaning of Section 10(3) of the OET Act, the
Assessing Authority rightly abandoned the Notice
dated 24.04.2023.
v. The fresh Notice dated 08.09.2023 in Form E-32 for
the purpose of reassessment under Section 10(1)
(Annexure-8) is also time-barred and it could not be
issued on change of opinion as the reason assigned
in Annexure-6 has been substituted/reviewed.
Having shown communication of acceptance of self-
assessment returns for the tax periods 01.04.2005
to 28.02.2006 by Letter dated 31.03.2023, no
reason is placed on record to indicate as to why it
took such a long period for communication since
2006, which clearly demonstrates that such fact of
acceptance of self-assessment returns did not exist
at all.
vi. Relying on Rule 34 of the OET Rules to exercise
power under Section 10(3) by adhering to
provisions of Section 49(2) of the OVAT Act is
untenable inasmuch as substantive provisions are
available in the OET Act and the Rules framed
thereunder. In present context does not fall within
the ken of expression ―for any other matters not
specified under these Rules‖ contained in Rule 34.
vii. Though not relevant in the present context in view
of the discussions made above, it may be analysed
that the Appellate Order being passed on
16.07.2019, the statutory Notices in Annexures-6
and 8 being issued in the year 2023, i.e.,
24.04.2023 and 08.09.2023, the same are barred
by period stipulated in Section 10(3) of the OET
Act. Section 10(3) of the OET Act having specified
―three years‖ for invoking jurisdiction to reassess in
the light of judgment or order which attained
finality, there is no scope to import period of ―five
years‖ specified in Section 49(2). However, the
stance taken by the opposite parties is repelled in
view of Indian Oil Adani Ventures Limited Vrs. State
of Odisha, 2025 SCC OnLine Ori 4024 and
discussions made supra on inapplicability of Rule
34 to the instant case.
10. With the aforesaid factual matrix, given legal perspective
and reasons mentioned hitherto, the Notice in Form E-
32, dated 24.04.2023 (Annexure-6) and the Notice in
Form E-32, dated 08.09.2023 (Annexure-8) are quashed
and consequential Assessment Order dated 12.07.2024
(Annexure-9) is hereby set aside.
11. In the wake of the above analysis and discussions, the
writ petition stands allowed and pending Interlocutory
Application(s), if any, is also disposed of, but in the
circumstances there shall be no order as to costs.
I agree.
(HARISH TANDON) (MURAHARI SRI RAMAN)
CHIEF JUSTICE JUDGE
Designation: Personal Assistant
(Secretary-in-charge) High Court of Orissa, Cuttack
Reason: Authentication
Location: ORISSA HIGH COURT, The 8th April, 2026//Aswini/MRS/Bichi/Laxmikant
CUTTACK
Date: 08-Apr-2026 20:51:58
