M/S.JAY BALAJI JYOTI V. DEPUTY COMMISSIONER

WP(C)/23473/2013

AI Insights

M/s. Jai Balaji Jyoti Steels Ltd. filed a writ petition challenging the legality of an assessment order under the Orissa Value Added Tax Act, 2004, which was passed ex parte. The petitioner argued that the assessment was illegal, arbitrary, and violated principles of natural justice, primarily because the Deputy Commissioner of Sales Tax did not provide copies of seized documents before requiring the production of regular books of account. The court examined whether the Assessing Officer was justified in insisting on the production of books of account before supplying the certified copies of the seized documents and reasons for reopening the assessment. The court also considered whether the petitioner was given a reasonable opportunity of hearing and whether the ex parte order was justified.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 726142 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 10-02-2015
• Assessment Year: misc
• Other Referred Cases: M/s Amar Jyoti Granite (India) Private Ltd. Vs. Sales Tax Officer, M/s. Sarada Store vs. Sales Tax Officer, Konark Tyres & Trade Vs. State of Orissa & others, Geeta Industries Ltd. Vs. Commissioner of Sales Tax, CCT Vs. Shukla and Brothers, Steel Authority of India Limited Vs. S.T.O., Rourkela, Raj Kishore Jha Vs. State of Bihar, Lakhiram Jain and Sons vs. Sales Tax Officer, Rayagada Circle, Rayagada, Kanak Cement Pvt. Ltd. vs. Sales Tax Officer, G.K.N. Driveshafts (India) Ltd. vs. Income Tax Officer, CIT Vs. K.Y.Pilliah and Sons
• Laws Referred To: Orissa Value Added Tax Act, 2004
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: R P KAR
• Assessee Lawyers: J SAHOO; ALOK MOHAPATRA
• Keywords: Assessment Order; Escaped turnover; Natural Justice; Seized documents; Tax Evasion
• Section: 43; 42; 44; 39; 40; 61(2); 73(7)

Judgement Text

"HIGH COURT OF ORISSA: CUTTACK. W.P.(C) NO.23473 OF 2013 In the matter of an application under Articles 226 and 227 of the Constitution of India. ----------- M/s. Jai Balaji Jyoti Steels Ltd. ... Petitioner -Versus- Deputy Commissioner of Sales Tax, Rourkela-II Circle, Panposh and others ... Opp. parties For Petitioner : Mr.J.Sahoo, Sr. Advocate Alok Mohapatra For Opp. Parties : Mr. R.P. Kar, Standing Counsel P R E S E N T: THE HONOURABLE SHRI JUSTICE I.MAHANTY AND THE HONOURABLE SHRI JUSTICE B.N. MAHAPATRA Date of Order: 10.02.2015 B.N. MAHAPATRA, J. The present writ petition has been filed challenging legality/validity of the order of assessment dated 17.07.2013 passed under Section 43 of the Orissa Value Added Tax Act, 2004 (for short, OVAT Act’) by opposite party No.1-Deputy Commissioner, Sales Tax, Rourkela Circle- 1, Panposh for the tax period 01.04.2008 to 20.05.2011 on the ground that the said order of assessment is illegal, arbitrary, without jurisdiction and has been passed in gross violation of principles of natural justice. The further prayer of the petitioner is to direct the opposite party No.1 to 2 release the seized documents/statements to the petitioner within a stipulated period of time. 2. Petitioner’s case in a nutshell is that the petitioner at the relevant time was a registered dealer under the provisions of the OVAT Act. For the tax period 01.04.2006 to 30.03.2011, the petitioner had been assessed under Section 42 of the OVAT Act vide assessment order dated 30.03.2011. The petitioner has not been assessed under the OVAT Act under Sections 39, 40, 42 and 44 for the period 01.04.2011 to 25.05.2011. Opposite Party No.2, STO, Investigation Unit, Rourkela Circle-2, Panposh visited the place of business of the petitioner- Company on 20.05.2011. On the date of inspection, without carrying on weighment of the physical stock, Investigating Officer alleged suppression of sale/purchase turnover. Opposite party No.2 without actual verification of the books of account and physical stock at the time of visit wanted production of accounts at his office for which notice in Form VAT 401 was issued to the petitioner fixing the date to 27.05.2011. In course of inspection, opposite party No.2 seized note books, files, documents vide seizure list dated 20.05.2011. Opposite party No.2 submitted the ex-parte report alleging suppression of purchase/sale turnover against the petitioner suggesting assessment of escaped turnover and tax for the aforesaid tax period. Thereafter, proceeding under Section 43 of the OVAT Act for the tax period 01.04.2008 to 20.05.2011 was initiated by issuing notice dated 28.03.2012 in Form VAT 307 fixing the date for production of regular books of account and documents to 10.05.2012. On the date fixed, i.e., 10.05.2012, the 3 petitioner appeared through Advocate and filed an application for supply of copies of documents seized by opposite party No.2 on 20.05.2011. The petitioner has also applied to the Assessing Officer for grant of copy of the order sheet and copy of the statement of the Assistant General Manager (Commercial), Sri S.Ladia recorded during inspection and to supply the reasons of reopening the assessment. Opposite party No.1- Deputy Commissioner of Sales Tax, Rourkela-II Circle, Panposh without granting copies of the seized documents and statements merely adjourned the proceeding from time to time and ultimately on 17.07.2013 the impugned order of assessment was passed raising tax and penalty to the tune of Rs.28,43,57,055.00. Hence, the present writ petition. 3. Mr.J.Sahoo, learned Senior Advocate appearing for the petitioner vehemently argued that the Assessing Officer has committed grave error of law in insisting the petitioner to produce the regular books of account and documents, before granting copies of seized documents to the petitioner. The Assessing Officer has legal obligation to release the note books/documents, which were seized from the petitioner and proposed to be utilized in the assessment/reassessment proceeding to the detriment of the assessee. Placing reliance on the orders of this Court in the case of M/s Amar Jyoti Granite (India) Private Ltd. Vs. Sales Tax Officer passed vide order dated 18.01.2007 in W.P.(C) No.15658 of 2006 and M/s. Sarada Store vs. Sales Tax Officer [OJC No.9381 of 1995] disposed of on 11.01.1996, it was submitted that the opposite party No.1 should have granted release of seized documents after 4 keeping authenticated copy of the same being signed by the assessee. No reasonable opportunity of hearing was afforded to the petitioner to produce the books of account. Placing reliance on the judgment of this Court in the case of Konark Tyres & Trade Vs. State of Orissa & others, (1996) 100 STC 74 (Orissa) and Geeta Industries Ltd. Vs. Commissioner of Sales Tax, (1996) 100 STC 48 (Orissa), it was submitted that the Assessing Officer ought to have communicated the reasons for initiating reassessment proceeding. It was further argued that the learned Assessing Officer has reproduced various figures submitted by opposite party No.2 and without any deliberation and application of judicial mind, as required under Rule 50(4) of OVAT Rules, the Assessing Officer endorsed the allegation raised in the report. Opposite party No.1 has simply noted the seized documents and number of written pages consisting dispatch/sale of sponge iron, iron ore fines, coal fines and accepted the report. 4. The petitioner in the present case cooperated with the Inspecting Officer. The action of opposite party No.1 in retaining seized documents for more than six months is in violation of provisions of Section 73(7) of the OVAT Act. The impugned assessment order has been passed in violation of principles of natural justice as no reason has been assigned for raising such demand. Such action of the Assessing Officer is contrary to the law laid down by the Hon’ble Supreme Court in CCT Vs. Shukla and Brothers, (2010) 4 SCC 785. Placing reliance on the judgment of the Hon’ble Supreme Court in the case of Steel Authority of India Limited Vs. S.T.O., Rourkela (2008) 16 VST 181 (SC) and Raj Kishore 5 Jha Vs. State of Bihar (2003) 11 SCC 519, Mr.Sahoo submitted that reason is the heart beat of every conclusion and without it the same becomes lifeless. Mr.Sahoo further submitted that as in the meantime, opposite party No.1-Assessing Officer disposed of the assessment proceeding by an ex- parte order, no prejudice will be caused to the interest of the opposite parties to return the seized documents to the petitioner and after granting an opportunity of hearing to the petitioner and examining the regular books of account to redo the assessment. While concluding his argument, Mr. Sahoo submitted that if this Court is not inclined to grant the relief claimed in the writ petition on merit, the petitioner may be given liberty to avail the alternative statutory remedy by way of filing appeal. 5. Mr.R.P.Kar, learned Standing Counsel for the Commercial Taxes Department submits that there is no infirmity and/or illegality in the impugned assessment order passed under Section 43 of OVAT Act. The petitioner had been assessed under Section 39 of OVAT Act for the period 01.04.2011 to 25.05.2011 before initiating proceeding under Section 43 of OVAT Act. Placing reliance on the judgment of this Court in the case of Lakhiram Jain and Sons vs. Sales Tax Officer, Rayagada Circle, Rayagada and another, (2009) 21 VST 280 (Orissa), Mr. Kar submitted that in the facts and circumstances of the case, the petitioner is obliged to produce the books of account first and then may ask for copies of the seized documents to give its reply against the allegations raised on the basis of seized documents and physical stock found on the date of inspection. This is necessary as during the course of inspection 6 and thereafter the petitioner-dealer failed to produce the books of account before the Inspecting Officer. The apprehension of the Department is that the transaction noted in the seized documents were not recorded in the regular books of account maintained by the petitioner and issuance of certified copies of those documents would give scope to the petitioner to manipulate its books of account in line with seized documents. It was further submitted that reasonable and ample opportunities have been afforded to the petitioner to explain the documents seized in course of inspection and thereafter by the Inspecting Officer as well as by opposite party No.1-Assessing Officer. But the petitioner did not avail the same by producing the books of account on some plea or other which is not legally sustainable. The petitioner having not approached this Court with clean hands it is not entitled to any discretionary relief. The averments made in the writ petition are misleading. 6. On the rival contentions of the parties, following questions fall for consideration by this Court. (i) Whether in the facts and circumstances of the case, the Assessing Officer is justified in insisting production of books of account before supplying the certified copy of seized document and reason for reopening the assessment? (ii) Whether reasonable opportunity of hearing has been afforded to the petitioner and thereby the principle of natural justice has been duly complied with before passing the impugned order of assessment? 7 (iii) Whether opposite party No.1-Assessing Officer is justified in passing the impugned order ex parte? (iv) Whether the Assessing Officer has passed the impugned assessment order assigning basis/reasoning for determination of the escaped turnover and tax due thereon and thereby the principle of natural justice has been duly complied with? (v) Whether the Assessing Officer is justified in accepting and relying on the allegations raised in the report in absence of any explanation furnished by the dealer to rebut the same despite availing several opportunities? (vi) Whether in the facts and in the circumstances of the case, it would be appropriate/legally permissible to set aside the ex parte assessment order and direct the Assessing Officer to return the seized document of the petitioner and after granting an opportunity of hearing to the petitioner and examining the regular books of account with reference to the seized documents to redo the assessment and by that no prejudice will be caused to the interest of the State? (vii) Whether the prayer of the petitioner to grant it liberty to prefer appeal in case it fails to succeed in the present writ petition can be accepted? 7. Question No.(i) is as to whether the Assessing Officer is justified in insisting production of books of account before supplying certified copies of the seized documents and reason for reopening the assessment. 8 Undisputed facts are that the dealer-petitioner carries on business in manufacturing and sale of sponge iron & M.S. Ingot. For the purpose of manufacturing of sponge iron the dealer, inter alia, uses iron ore, coal and dolomite as raw materials. For manufacturing of M.S. Ingot, the dealer uses sponge iron, pig iron M.S. Scrap, Ferro waste, scrap, slag, C.I. mould C.P.C. and silicon manganese as raw materials. The dealer effects sales inside the State, in course of Inter-state trade and commerce as well as in course of export. On 20.05.2011, opposite party No.2-Sales Tax Officer, Investigation Unit, Rourkela-II, Panposh visited the place of business of the petitioner-company and in course of inspection, the Inspecting Officer seized the books of accounts consisting of note books, files and other documents vide Annexure-B/1 attached to the petitioner’s additional affidavit dated 12.01.2015 as he has reason to believe that the transactions noted therein apparently revealed evasion of tax revenue. The books of account consisting of note books, files and other documents seized vide Annexure-B/1 on the date of inspection shall hereinafter be referred to as “seized documents”. During inspection books of account statutorily required to be maintained were not produced before the Inspecting Officer. Subsequently, on receiving a fraud case report from the Deputy Commissioner of Commercial Taxes, Enforcement Range, Sambalpur (hereinafter referred to as “Inspecting Officer”), a proceeding under Section 43 of the OVAT Act was initiated by issuing notice dated 28.03.2012 for assessment of tax on escaped turnover in Form VAT 307 for the above tax period. 9 In the said notice dated 28.03.2012, the petitioner was informed that the whole/part of sale and purchase for the aforesaid tax period has escaped assessment for which the dealer was required to appear before the opposite party No.1-Deputy Commissioner of Sales Tax, Rourkela Circle, Panposh, Sundargarh on 10.05.2012 with the books of account relating to his business maintained as per OVAT Act and Rules framed there-under. By the said notice, the dealer-petitioner was further informed that in the event of its failure to comply with the terms of that notice, the opposite party No.1 shall proceed to assess the petitioner under Section 43 of the OVAT Act to the best of his judgment. The petitioner-dealer was also directed to show cause as to why in addition to the amount of tax that may be assessed on it, a penalty equal to twice the amount of tax assessed shall not be imposed on it under sub-Section (2) of Section 43 of the OVAT Act. 8. On receiving the aforesaid notice dated 28.03.2012, the petitioner made an application on 10.05.2012 before opposite party No.1-Assessing Authority stating therein that, “production of Books of Account could not be possible unless we receive certified copy of the documents seized by the Investigation Unit, Rourkela from our factory at Teinsar dated 20.05.2011. Therefore, we request your goodself to kindly allow us time to produce books of account after we receive certified copy of the documents as applied for.” At this juncture, it may also be relevant to refer Annexure-4 series attached to the writ petition which contain copies of the applications filed by the petitioner-dealer before the Assessing Officer on 10 various dates. Copy of the application dated 16.07.2013 contains similar reason for not producing books of account. In that application, it is mentioned that “we have not yet received the certified copy of the documents as applied for on 10.05.2012. Unless and until certified copy of the above documents is received we are unable to clarify the allegations made by the Investigation Unit, Rourkela in the said report.” Letter dated 18.10.2012 reveals that the dealer asked for the reason of reopening the assessment. Further, vide letter dated 27.08.2012, the petitioner intimated opposite party No.1-Assessing Officer that “we request your goodself to kindly intimate us the reason for reopening the case for the period from 01.04.2008 to 20.05.2011 and after which we shall be able to produce books of account as called for.” Again vide letter dated 30.09.2012, the petitioner intimated opposite party No.1- Assessing Authority that “unless and until the report is confronted, the reasons for reopening the case is intimated as well as certified copy as applied for is issued, we will be not in a position to produce the documents for verification”. 9. Now the question arises whether the dealer-petitioner is justified to impose any pre-condition(s) to produce the books of account, i.e., only after receipt of the certified copy of the seized documents and reason for reopening the assessment etc., the petitioner would produce the books of account. 10. As it appears, the Assessing Officer insisted upon production of the books of account time and again without issuing certified copy of 11 the seized documents and intimating the reason for reopening the assessment. Let us also examine whether the Assessing Officer is justified in insisting upon production of regular books of account before supplying the copy of the seized documents and the reasons for reopening the assessment. 11. At this juncture, it would be appropriate to refer to the judgment of this Court in the case of Lakhiram Jain and Sons (supra), wherein, the question that fell for consideration before this Court was whether the Assessing Officer is justified in insisting upon production of the books of account for verification before issuing certified copies of the seized documents. This Court in the said case, taking note of several judgments of this Court and Hon’ble Supreme Court including judgment in the case of Kanak Cement Pvt. Ltd. vs. Sales Tax Officer, [1997[ 105 STC 112 (Orissa) and G.K.N. Driveshafts (India) Ltd. vs. Income Tax Officer, (2003) 259 ITR 19 (SC), held as follows: “...Needless to say that an assessing authority is entitled to collect the materials behind the back of the assessee. It is not necessary that all the materials so collected by the assessing authority need be confronted to the assessee. Only those materials which the assessing authority wants to utilize against the assessee in assessment is bound to be disclosed to the assessee. In appropriate cases, the assessee can also demand for cross-examination of any person who stated something adverse to him which the assessing authority wants to utilize against the assessee.” 12 Thereafter, this Court held at which stage the seized documents are to be supplied to an assessee. The relevant portion of the said judgment is reproduced below:- “Therefore, it cannot be said that the assessing officer has committed any error in insisting upon production of books of account before issuing the certified copy of the seized materials. Production of books of account prior to issuance of certified copy of the seized materials is necessary to rule out the possibility of preparation of accounts in line with the seized documents. This has become further necessary in this case as at no stage books of account were produced earlier at the time of inspection or before the assessing officer. However, we make it clear that where in the course of inspection the inspecting officer seizes incriminating materials as well as regular books of account from the business premises of a dealer, the assessing officer or the inspecting officer shall supply copies of the seized regular books of account and incriminating material (s) to the dealer if he asks for the same before asking the dealer for furnishing his explanation in connection with any proceeding under the OVAT Act.” (underlined for emphasis) 12. In the instant case, undisputedly, the petitioner did not produce its regular books of account at the time of inspection in its premises on 20.05.2011. It may be relevant to mention here that Section 61(2) of the OVAT Act requires the dealer to keep all its books of account in its place of business. Thereafter, the Inspecting Officer also allowed sufficient time to the petitioner for production of the books of account for the purpose of examination of the same with reference to the seized documents and for this purpose fixed the date to 18.06.2011 and 15.07.2011 on which dates the dealer-petitioner did not produce the same. 13 The petitioner also did not produce the regular books of account before the Assessing Officer, though several opportunities were provided to the petitioner. On the other hand, it imposed a precondition that only after receiving copy of the seized documents and reason of reopening it will produce the books of account. Such a plea has no legal support. 13. So far as supply of reason for reopening of assessment is concerned, it may be noted here that vide notice dated 28.03.2012 in Form VAT-307 issued under Sub-rule (1) of Rule 50 for initiating reassessment proceeding, the petitioner was intimated that it appeared to the Assessing Officer that its whole/a part of turnover of sales/purchases for the tax period 01.04.2008 to 20.05.2011 has (i) escaped assessment, (ii) has been under assessed. Needless to say that the petitioner is entitled to be intimated the detailed reason as to why it appeared to the Assessing Office that its turnover of sales/purchases for the aforesaid tax period has escaped assessment and/or has been under assessed. Such detailed reason is nothing but the contents of the seized documents which were seized in course of inspection. In the preceding paragraphs a detailed discussion has been made as to why the contents of the seized documents cannot be supplied before production of the regular books of account. The same reason is applicable as to why before production of the regular books of account the detailed reason for initiating reassessment proceeding cannot be supplied to the dealer- petitioner. 14 14. At this juncture, it may be appropriate to reproduce here the relevant portion of the judgment of the Hon’ble Supreme Court in the case of G.K.N. Driveshafts (India) Ltd. (supra), wherein, it is held as under: “....when a notice under section 148 of the Income- tax Act, 1961, is issued, the proper course of action for the noticee is to file a return and, if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish the reasons within a reasonable time”. (underlined for emphasis) 15. It needs to be noted that production of the books of account is not dependent on the receipt of copies of seized documents and/or knowing of reasons for reopening the assessment. The regular books of account are required to be maintained statutorily and to be in custody of the petitioner. The Assessing Officer had issued notice for production of the regular books of account in the custody of the petitioner. Issuance of copies and supply of reasons are wholly unconnected with production of the regular books of account. As noted (supra), there is ample scope for manipulation. It was open to the petitioner to contend that all transactions noted in seized documents are entered in the regular the books of account. 16. In view of the above, the Assessing Officer is justified in insisting upon the production of the books of account before supplying certified copy of the seized documents and reason for reopening the assessment and the action of petitioner-dealer in not producing the books of account pursuant to the statutory notice and subsequent 15 intimation on the plea that the same would be produced after receipt of copies of the seized documents is contrary to law and mala fide. 17. The order of this Court dated 11.01.1996 passed in W.P.(C) No.9381 of 1995 and the order of this Court dated 18.01.2007 passed in W.P.(C) No.15658 of 2006 are of no assistance to the petitioner, since, in those cases the Department has seized the regular books of account of the dealers and in the first case the petitioners had made a prayer to release those regular books of account for the purpose of producing before the Sales Tax Officer in reassessment proceeding under Section 12(8) and in second case for tax audit, this Court directed release of those books of account after keeping authenticated copy of the same. In the instant case, the regular books of account have not been seized by the Department and the same are lying with the petitioner. 18. Questions No.(ii) and (iii) being interlinked, they are dealt with together. The questions are whether reasonable opportunity of hearing has been afforded to the petitioner and thereby principle of natural justice has been complied with before utilizing the incriminating materials seized from its business premises against the petitioner and Assessing Officer is justified in passing the impugned order ex parte. 19. When a proceeding under Section 43 of the OVAT Act is initiated on the basis of a report submitted by any agency, the assessee is entitled to be heard at two stages, i.e., (i) in course of inspection of the business premises till submission of the report by the inspecting officer, (ii) after commencement of the re-assessment proceeding by issuance of 16 notice for assessment of tax on escaped turnover till order under Section 43 of the OVAT Act is passed. 20. In the instant case, undisputedly in course of inspection of the business premises of the petitioner on 20.05.2011, the inspecting team found ten sets of written documents indicating materials received and dispatched and stock etc. Since the Asst. General Manager (Commercial) of the Company, on the date of visit did not produce the regular books of account and failed to explain the contents of the said documents, the Inspecting Officer seized those documents, in exercise of power under Section 73(6) of the OVAT Act and the dealer was issued with a notice in Form VAT 401 requiring it to produce the books of account. It may be relevant to mention here that Section 61(2) of the OVAT Act provides that every registered dealer shall keep, at his place of business as recorded in the certificate of registration, all accounts, registers and documents maintained in the course of business: provided that if any such dealer has established branch offices of the business at different places of the State other than the principal place of his business, the relevant accounts, registers and documents in respect of each such branch shall be kept by him at the concerned branch. On the date of inspection, statement was recorded on S.A. from Sanjay Kumar Ladia, the Asst. General Manager (Commercial) of the Company and he undertook to produce books of account/documents as indicated in Form VAT 401 on 27.05.2011. On 27.05.2011, no books of account/documents was produced as required under Form VAT 401 and undertaken by the dealer. However, two petitions were moved on 17 24.05.2011 and 16.06.2011 seeking time for production of books of account. On these two time petitions, the date was adjourned to 18.06.2011 and 15.07.2011 respectively for production of books of account. But on those two dates, the dealer did not produce his books of account. 21. It may be appropriate to reproduce here the relevant portion of the assessment order: “In pursuance to the information gathered from a reliable source; as regards to the clandestine business activity and irregular maintenance of the books of account by the above named dealer. The Enforcement Team, headed by the by the Sales Tax Officer along with three Asst. Sales Tax Officers of the Investigation Unit, Rourkela has been visited the place of business on dt. 20.05.2011 at about 1.15 P.M. as per U/s 73(4) of the O.V.A.T. Act, 2004. At the time of visit, to the manufacturing unit, Sri Sanjay Kumar Ladia, Asst. General Manager Commercial of the Company was present in the factory premises and extend all required co-operation to conduct enquiry into the details business activities of the firm, to examine the detail stock of finished product, raw materials and to verify the complete books of account for the tax period from 01.04.2008 to 20.05.2011. Exhaustive stock of Ms Ingot available in the factory premises are recorded in a separate sheet of paper as dictated, counted and reported by the factory supervision who has signed on it and later on validated by the Asst. General Manager Commercial of the company. In course of inquiry 10 sets of written documents, indicating the materials received and dispatched were found in the business premises. In the event of not explained the written contents of the said documents by the Asst. General Manager Commercial of the company on the date of visit, these were seized as per U/s. 73(6) of the OVAT Act and detail copy of it was handed over to him for future reference for production of books of account and for verification of the seized documents. The person contacted failed to produce the complete books of account on the date of visit. Hence, he was asked to submit the same as per notice in Form VAT 401 issued on that date. A statement in 18 that regard was recorded on S.A. from Sri Sanjay Kumar Ladia, the Asst. General Manager Commercial Company and he was undertaken to furnish relevant documents as sought in the notice in Form VAT 401 issued on the date of visit, fixing the date on 27.05.2011 at 09 A.M. in the office, Investigation Unit, Rourkela. In response to the notice, the authorized signatory of the Company filed time petition on 24.05.2011 and 16.06.2011 to adjourn the date for production of books of account as per the date and time intimated on the notice. So, accordingly, the date was adjourned to 18.06.2011 and 15.07.2011 respectively. But in spite of giving adequate opportunity of being heard, the dealer company did not turn up to produce books of account for verification. Thus, in the absence of adequate co- operation received from the seized documents in the file. The report is completed to be prepared on ex- parte in the above circumstances.” (underlined for emphasis) 22. In the above circumstances, the Inspecting Officer submitted his report after analyzing the seized documents and treating the transaction of sale and purchase recorded therein as suppressed transactions. 23. Before the Assessing Officer, hearing commences on issuance of the notice for assessment of tax on escaped turnover in Form VAT 307 under sub-rule (1) of Rule 50. Notice for assessment of tax on escaped turnover in Form VAT 307 was issued to the petitioner on 28.03.2012 through process server fixing the date to 10.05.2012. Pursuant to the said letter, the petitioner filed a time petition and the case was adjourned and posted to 06.06.2012. Since the petitioner did not turn up on the date fixed, one more intimation was issued to the petitioner. On 18.07.2012, the petitioner again moved a time petition. Thereafter, two more intimations were issued to the petitioner. On those 19 dates, the dealer did not produce the books of account. However, in response to notice dated 11.10.2012, the petitioner filed a petition to intimate him the reasons of reopening the case. On 27.06.2013, another intimation was issued to the dealer fixing the date to 16.07.2013. On that date, the dealer failed to appear before the Assessing Officer to produce the books of account. Thereafter, the impugned ex parte assessment order was passed. Thus, it may be seen that though several opportunities were given by the Assessing Officer for hearing, the petitioner-dealer did not produce the books of account on some plea or other, which is not legally sustainable and/or contrary to law. 24. In the above facts situation, we are of the considered view that reasonable opportunity of hearing has been afforded to the petitioner and thereby principle of natural justice has been duly complied with before passing the impugned assessment order and the Assessing Officer is fully justified in passing the said order ex parte. 25. Question Nos.(iv) and (v) being interlinked, they are dealt with together. The questions are whether any basis/reason has been assigned for determination of the escaped turnover and levy of tax thereon in the impugned assessment order and the Assessing Officer is justified in accepting the allegations raised in the report. 26. Law is well-settled that the Assessing Officer has to assign reasons in support of its determination of escaped turnover and the tax sought to be levied thereon. But where the Assessing Officer 20 concurs with the conclusions, which are based on materials as expressed by the Inspecting Officer and he has no additional material to record its findings, in its order, the said order cannot be vitiated merely because it concurs with reasons assigned by the Inspecting Officer to determine the escaped turnover and levying tax thereon. 27. It may be relevant to refer here the judgment of the Hon’ble Supreme Court in the case of CIT Vs. K.Y.Pilliah and Sons, 63 ITR 411, wherein it is held that the Income Tax Appellate Tribunal is the final fact finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the grounds of the Appellate Assistant Commissioner on which the decision was given against the assessee or the Department. The above decision of the Hon’ble Supreme Court implies that the Tribunal is not required to repeat the reasons, when it agrees with the reasoning given by the learned CIT(A) in the impugned order. 28. The reasons assigned by the Assessing Officer in the assessment order for accepting the allegations raised in the report is reproduced below: “In view of the above allegation, it was considered necessary to reopen the case for assessment U/s. 43 of the O.V.A.T. Act, 2004. Accordingly, a notice 21 for assessment of tax on escaped turnover in Form VAT 307 (sub-rule (1) of Rule 50) of the O.V.A.T. Act) was issued to the dealer on dated 28.03.2012 through process server fixing the date to 10.05.2012. The dealer has responded the notice and filed time petition. The case is consider and posted to 06.06.2012. On dt. 06.07.2012 the dealer has not responded, hence issued one more intimation to the dealer. But the dealer has filed time petition on dt. 18.07.2012. Again two more intimation issued to the dealer, at last the dealer Ld. Advocate Mr. D.K. Agarwal appeared and filed petition for reason of reopening the case, the case is partly heard. On dt. 27.06.2013 issued intimation to the dealer fixing date to 16.07.2013. The dealer has failed to appear before the under signed and not produced the books of accounts for verification. It is clear that, the intention of the dealer is not to cooperate for completion of assessment proceedings. Hence looking no other way, the assessment is completed to the best of judgment. Considering the allegation contained in the tax evasion report submitted by D.C.C.T., Enforcement, Sambalpur as true and correct, the re-assessment order is decided on ex parte basing on the information and materials available in the record on merit.” (underlined for emphasis) 29. There is no quarrel over the legal proposition that there should be some reasoning recorded for declining or granting relief. The Hon’ble Supreme Court in the case of Shukla and Brothers (supra) held that requirement of recording of reasoning necessarily does not mean a very detailed or lengthy order. In the instant case, the Assessing Officer has given the basis/reasons in support of determination of the escaped turnover and tax due thereon. 30. As stated above, in course of inspection on 20.05.2011, the petitioner failed to explain 10 sets of documents found by the 22 inspecting team in its place of business. After the inspection, though opportunities were afforded to the petitioner to produce the books of account for verification, the dealer did not produce the books of account. Further, the petitioner-dealer also failed to produce the books of account before the Assessing Officer though several opportunities were afforded to it. In the assessment order, the Assessing Officer has reproduced various allegations/ conclusions of the Investigating Officer against the petitioner and calculation of the amount of tax alleged to have been evaded by the petitioner during the tax period. Perusal of the assessment order reveals that the amount of tax alleged to have been evaded is based on the transaction of sales and purchases noted in the seized documents and physical stock found on the date of inspection. 31. In view of the above, it cannot be said that the Assessing Officer without assigning any reason has passed the impugned order of assessment in violation of Rule 50(4) of the OVAT Rules and principles of natural justice has not been duly complied with and the Assessing Officer has committed any wrong in accepting the allegations raised in the report of the Investigation Officer. 32. Question No.(vi) is Whether in the facts and in the circumstances of the case, it would be appropriate/legally permissible to set aside the ex parte assessment order and direct the Assessing Officer to return the seized documents of the petitioner and after granting an opportunity of hearing to the petitioner and examining the regular books of account with reference to the seized documents to redo the 23 assessment and by that no prejudice will be caused to the interest of the State. 33. Admittedly, in the present case, an ex parte assessment order has been passed due to non-production of the books of account by the petitioner-dealer before the Assessing Officer for the purpose of examination of the same with reference to the seized documents. As stated above, the petitioner also did not produce its books of account before the Inspecting Officer. 34. It may be relevant to mention here that the statute provides under which circumstances an ex parte order can be passed by the Assessing Officer. If such a power is not vested with the Assessing Officer then unscrupulous/ dishonest businessmen who have indulged in clandestine business to evade tax shall escape from payment of legitimate tax due to the State, simply by not producing the books of account /documents for verification with reference to the incriminating materials collected and refraining themselves from participating in the assessment proceeding on some plea or other. 35. Needless to say that all ex parte orders need not be set aside by higher court/authority for giving further opportunity of hearing to the party against whom ex parte order has been passed. Whether an ex parte order is to be set aside for giving further opportunity of hearing or not, it always depend on facts and circumstances of each case. There are certain cases where if ex parte orders are set aside to give an opportunity of hearing to the aggrieved parties that may amount to granting a boon to such parties, as they 24 would be able to achieve their unholy purpose and in that case the very purpose of passing ex parte order is frustrated. For example, in the instant case, the petitioner-dealer did not only fail to produce the regular books of account during inspection of its business premises nor before the Assessing Officer and instead offered to produce the same only after receiving copies of the seized documents and reason of reopening. The obvious reason for putting forward such a pre-condition is that the petitioner wanted to know the contents of seized documents before production of regular books of account so that he could be able to manipulate/prepare its regular books of account, in line with contents of the seized document. Despite a number of opportunities being allowed to produce the regular books of account, the dealer-petitioner did not produce the same and thereby the Assessing Officer was compelled to pass the assessment order ex parte disclosing the contents of the seized documents in the assessment order. If the said ex parte order is set aside and the dealer would be given an opportunity to produce its regular books of account before the Assessing Officer, the dealer could easily incorporate in its regular books of account the entries recorded in seized documents and thereafter produce the manipulated/ prepared books of account. In that event, the very purpose of conducting surprise visit to the place of business of a dealer to find out as to whether all the business transactions are recorded in regular books of account and tax due thereon has been paid shall be frustrated and a dealer who was indulged in clandestine business will 25 be benefited due to setting aside of an ex parte order to give him a further opportunity, to produce his regular books of account for the purpose of examining those with reference to seized documents. 36. Further, though the contents of the seized documents have been disclosed in the impugned assessment order (Annexure-3), no averment has been made in the writ petition explaining the contents of the seized documents. No averment has also been made as to how the transactions noted in the seized documents have been accounted for in the regular books of account and whether tax due on those transactions has been paid. In course of hearing also, no material has been brought before us to show as to how the transaction noted in the seized documents are recorded in the regular books of account and that why the determination of escaped turnover and calculation of tax thereon on the basis of seized documents are in any manner wrong/incorrect. Similarly also the physical stock of 71.400 MT of MS ingot found in the business premises of the dealer-petitioner on the date of inspection by the Inspecting Party has not been explained at any point of time with reference to regular books of account. 37. For the reasons stated above, we are of the considered view that serious prejudice shall be caused to the interest of the State, if after disclosure of the entries made in the seized documents in the ex parte assessment order, the said order will be set aside and an opportunity would thereafter be given to the petitioner-dealer to produce its regular 26 books of account for the purpose of examination of the said accounts with reference to the seized documents. 38. Question No.(vii) is whether the prayer of the petitioner to give it liberty to prefer appeal in case it fails to succeed in the present writ petition on merit can be granted to the petitioner. 39. The above prayer of the petitioner is misconceived and cannot be granted. Needless to say that if the High Court is called upon to decide the legality of an order of assessment on its own merit, it would be a futile exercise to relegate the petitioner-dealer to approach the statutory appellate authority after the High Court deciding the case on merit. Therefore, the plea of the petitioner that this Court can after adjudicating the merits of the issues involved grant liberty to the petitioner to avail statutory remedy is fallacious and such a prayer of the petitioner cannot be allowed. It may be relevant to note that when the above prayer was advanced by Mr. Sahoo, Senior Advocate in course of his argument, he was specifically asked as to whether he wants to withdraw the writ petition and approach the appellate authority, he categorically denied the same and persisted with the above prayer. 40. For the reasons stated above, the writ petition is dismissed. ……………....…………. B.N. Mahapatra, J. I. Mahanty, J. I agree. ..................……….. I. Mahanty, J. Orissa High Court, Cuttack Dated 10th February, 2015/ss/skj "