In a setback to Sky Automobiles, the Orissa High Court upheld the reopening of the computation of surcharge.
The petitioner, M/s. Sky Automobiles challenged a notice issued by the Deputy Commissioner of Sales Taxes (DCST) calling upon the Petitioner to appear before him for the purposes of re-computation of tax under the Orissa Sales Tax Act, 1947 (OST Act).
The Tribunal passed an order dated 29th November 2007 and directed the Department to re-compute the tax liability by allowing a set-off of entry tax from the tax due and thereafter levy surcharge on it. Accordingly, a re-computation order was passed by the STO on 25th July 2008 and the excess amount to the tune of Rs.29,57,232/- was refunded to the Petitioner.
The grievance of the Petitioner is that the Department cannot on the basis of the judgment in Bajaj Auto (SC) seek to reopen the computation of surcharge for the periods 2000-01, 2001-02, and 2002-03.
Mr. Sahoo, learned Senior Advocate for the Petitioner, submits that the earlier orders granting refund to the Petitioner for the aforementioned tax periods had attained finality and in fact, the refund was made to the Petitioner. This cannot be sought to be reopened after a long lapse of time. He further submitted that those orders which resulted in a refund being granted to the Petitioner were appealable. However, the Department did not choose to either file an appeal or a revision in this Court. The Department in fact accepted those orders. Thus, long before the judgment of the Supreme Court in Bajaj Auto (SC) on 28th October 2016, the issue pertaining to the Petitioner for the periods earlier to 2003-04 was laid to rest.
Mr. Sahoo submits that Section 28-B of the OST Act provides for the limitation period for the reopening of assessment and even this period had been crossed. He accordingly submits that in the absence of any statutory provision, the Department cannot revive the demand for those earlier periods by mere orders of re-computation. He points out that there is no provision in the OST Act corresponding to Section 49-A of the Orissa Value Added Tax Act, 2004 (OVAT Act) to enable the Department to issue a re-computation order to revive an enforceable demand. Having failed to invoke the statutory remedy available to it in law, the Department cannot take advantage of the subsequent judgment of the Supreme Court.
The division bench is headed by Chief Justice Dr. S. Muralidhar and Justice B.P. Routray held that the impugned re-computation orders of the Department as well as the notice dated 11th January 2017 except to the extent of interest on surcharge. A direction is therefore issued to the DCST to issue fresh orders re-computing the amount payable on the basis of the limited modification as regards interest, not later than 1st November 2021. It is made clear that it would not be open to the Petitioner to again challenge the said order as long as it is in conformity with the directions issued in the present judgment of this Court.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
