The High Court (HC) Orissa held the revisional Jurisdiction cannot be invoked when the remedy of appeal under section 78 of the Orissa Value Added Tax Act, 2004 (OVAT) Act is available.
Sri Krishna Solvent Extraction, challenging a re-assessment order passed by the Deputy Collector, Sales Tax, Bargarh Circle, Bargarh, for which the Appellant preferred an appeal before the Additional Commissioner of Sales Tax (Appeal). The said appeal came to be allowed by the order dated 29th June 2018, in terms of which it was held that the Appellant had paid excess tax amount of Rs.2,25,277/-. It was directed to be refunded to the Appellant.
After two years the Commissioner of Sales Tax invoked suo motu revisional power under Section 79(1) of the OVAT Act and issued a show-cause notice dated 12th May 2020 to the Appellant. It was alleged that there was less reversal of ITC amounting to Rs.39,47,338/- resulting in underassessment of tax and irregular allowance of a tax credit of Rs.7,16,865/-.
Justice M S Raman observed that in the case of M/s. Sarala Project Works Pvt. Ltd. v. Additional Commissioner of Sales Tax, Cuttack & Others, it was held that “the specific averment of the Petitioner that the very purpose of which notice under Section 79(4) of the OVAT Act was issued by the Commissioner was already the subject matter of the appeal before the JCST, and that the Department itself could have gone in appeal against the said order under Section 78 of the OVAT Act has remained uncontroverted. In terms of Section 79(4)(b) read with Section 79(5) of the OVAT Act there is a clear statutory bar to the Commissioner exercising suo motu revisional power in such circumstances.”
While allowing the appeal, the Court set aside the impugned order dated 28th September 2021 of the Commissioner.
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