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In the Honble High Court of Orissa : Cuttack.W.P. (C) No. __________ of 2 0 1 5.Code No. 170403

In the matter of:An application under Articles 226 and 227 of the Constitution of India, 1950;A N DIn the matter of:An application under the Central Sales Tax Act, 1956 and rules framed thereunder;A N DIn the matter of:An application challenging the assessment order dated 20.02.2015 passed by the Joint Commissioner of Sales Tax, Sundargarh Range, Rourkela under Rule 12(3) of the Central Sales Tax (Odisha) Rules, 1957 for the period from 01.04.2011 to 31.03.2013;A N DIn the matter of:An application assailing the sanctity and legality of audit visit report purported to have been prepared and submitted by the Deputy Commissioner of Sales Tax, Rourkela-II Circle, Panposh under Rule 10 of the Central Sales Tax (Odisha) Rules, 1957 pursuant to which the impugned assessment order dated 20.02.2015 was passed by the Joint Commissioner of Sales Tax, Sundargarh Range, Rourkela under Section 12(3) of the said Rules for the period from 01.04.2011 to 31.03.2013;A N DIn the matter of:An application with a prayer to hold imposition of mechanical penalty invoking exercise of power under Section 12(3) of the Central Sales Tax (Odisha) Rules, 1957 without issue of notice and/or calling for show-cause;A N DIn the matter of:M/s. Siemens Ltd.A company registered under the Companies Act, 1956 having its registered office at 130, Pandurang Budhkar Marg, Worli, Mumbai in the state of Maharastra and a Branch Office at Qr. No. C/320, Koelnagar,Rourkela 769 014, District: Sundargarh in the State of Odisha bearing TIN No.21922000069 represented by Power of Attorney Sri Prithanu Bhattacharjee, Manager Indirect Tax ........ Petitioner Versus1. State of Odisharepresented through its Secretary, FinanceOdisha SecretariatBhubaneswarDistrict : Khurda, Odisha.2. Commissioner of Sales Tax, Odisha having his office at: Banijyakar BhawanP.O.: BuxibazarCity & District: Cuttack 753 001, Odisha.3. Joint Commissioner of Sales TaxSundargarh Range, RourkelaAt/po-Uditnagar, Rourkela, Dist-Sundargarh, Odisha.4. Deputy Commissioner of Sales Tax Rourkela-II Circle,At/po-Uditnagar, Rourkela, Dist-Sundargarh, Odisha....Opposite parties.ToThe Honble Shri Pradip Kumar Mohanty, LL.B., the Acting Chief Justice of Orissa High Court and His companion Justices of the said Honble Court.Humble petition of the petitioner above named;

Most respectfully sheweth:1. The petitioner in this writ petition challenges (a) the assessment order dated 20.02.2015 passed under Rule 12 of the Central Sales Tax (Odisha) Rules, 1957 [in short CST (O) Rules] by the Joint Commissioner of Sales Tax, Sundargarh Range, Rourkela-opposite party No.3 as the same is violative of principles of natural justice, arbitrary, illegal and tainted with perverse finding of fact. The petitioner asserts that the assessment order is liable to be quashed as it is barred by limitation, and also against the provisions of the C.S.T. (O) Rules.It is salient feature of the principles of natural justice that a person should not be judge of his own cause. The assessment being undertaken and completed by passing order by an authority who was involved in the audit process, the entire proceeding is vitiated in view of ratio laid down in Tata Sponge Iron Ltd. Vrs. Commissioner of Sales Tax, (2012) 49 VST 33 (Ori) and ABB Ltd. Vrs. State of Odisha, (2015) 77 VST 124 (Ori).(Original copy of the assessment order is filed herewith and marked as Annexure-1.)(b) The order of the assessment is also against the provisions of the Central Sales Tax Act, 1956 and rules made thereunder as it has rejected the petitioners claims of exemption of second sales.Subsequent sales made under section 6(2) of the C.S.T. Act on vague reasonings thereby violating the provisions of the article 286 of the Constitution of India.(c) The order of assessment is also illegal because the assessing authority has sought to reject the petitioners sale under section 6(2) of the C.S.T. Act, 1956 without giving a proper notice of show cause to the petitioner before rejecting the same, and by first adding the turnover of said subsequent sale to the turnover under the OVAT Act. The assessing authority has also traversed beyond the contents of the audit Visit Report (AVR).The order of the assessment is therefore arbitrary, illegal and bad in law and against the provisions contained in the Central Sales Tax act, 1956, and against the provisions contained in Articles 19(1)(g) and 286 of the Constitution of India and liable to be quashed. 2. The petitioner prays for an order for quashing the order of assessment in Annexure-1.3. The petitioner is a Company registered under the Companies Act, 1956 having it's Registered Office at Pandurang Budhkar Marg, Worli, Mumbai in the State of Maharastra and has a branch office at C/320,Koel Nagar, Rourkela in the district of Sundargarh in the State of Odisha. That most of the shareholders of the petitioner company are citizens of India and carry on the business of manufacture and supply of Electrical Equipments etc. throughout the country. The cause of action arises within the territorial jurisdiction of this Hon'ble Court.4. The facts leading to the present Writ Application inter alia are:(a) The petitioner is a Company registered under the Companies Act, 1956 having it's Registered Office at Worli, Mumbai in the State of Maharashtra and a local office at Rourkela in the district of Sundargarh in the State of Odisha.(b) The petitioner carries on the business of manufacture, sale and supply of Electrical Equipments and Electrical Goods and also carries on the business of Works Contracts for erecting the said Equipments and Goods at Customer's Sites throughout the State of Odisha. For the aforesaid transactions the petitioner is registered as a "Dealer" under the Odisha Value Added Tax Act,2004 and under the Central Sales Tax (Registration & Turnover) Rules, 1957 with the Deputy Commissioner of Sales Tax (Hereinafter for short mentioned as DCST) O.P.No.4 bearing TIN 21922000069.The petitioner has been filing its returns regularly and paying the admitted taxes thereon. That for the present impugned period being 1.4.2011 to 31.3.2013, the petitioner has executed contracts with Tata Steel Ltd, Bhushan Steel Ltd, Indian oil Corporation Ltd, Praxaair India Pvt Ltd, Mcnally Bharat Engg Co. Ltd., Thermax Ltd., OCL Iron & Steel Ltd., Steel Authority of India Ltd., Bhushan Energy Ltd., Bhushan Power & Steel Ltd., Essar Projects (India) Ltd., Hindalco industries Ltd., Rungta Mines Ltd., Utkal Alumina International Ltd., Jindal Stainless Ltd., Vedanta Aluminium Ltd., BOC India Ltd., Bhilai Engineering Corporation Ltd., BRG Iron and Steel, Concast Steel & Power Ltd., Reliable Hitech Infrastructure Pvt Ltd., Sterlite Energy Ltd., Ultratech Cement Ltd., Larsen & Toubro Ltd., Hindustan Coca-Cola Beverages, Thermax Ltd., Tata Projects Ltd., (hereinafter for short mentioned as CUSTOMERS for design, engineering, manufacture, procurement and supply of electrical equipments and for erecting the said equipments at customer's sites in Odisha. ( A photocopy of the contract between the petitioner and the Vedanta Aluminium Ltd. is enclosed herewith and marked as Annexure- 2).(c) That under the aforesaid contracts, the petitioner was to design the equipments, manufacture and supply Electrical Equipments either by itself or through Sub-Vendors approved by the CUSTOMERS. Under the said contract the Equipments are to be designed and engineering done and after the same are done, they are to be approved by the CUSTOMERS and after the designs are approved, they would be manufactured either in the petitioner's works situated in various places throughout the country or through approved Sub-Vendors of the aforesaid CUSTOMERS. That after the said goods are manufactured the same are tested by the CUSTOMERS at the Petitioner's Works/Sub-Vendor's Works and after the CUSTOMERS are satisfied that the said goods are manufactured in pursuance to the specifications mentioned in the contracts, they give despatch clearance and the equipments are thereafter despatched to the CUSTOMERS in the State of Odisha. The Consignor mentioned in the Lorry Receipt is the Sub-Vendor or the petitioner situated in the Non-Odisha States and the Consignee is the CUSTOMERS situated inside the State of Odisha. (d) The invoices are raised by the Sub-Vendors on SIEMENS i.e. the petitioner and thereafter the petitioner raises an invoice on the aforesaid CUSTOMERS. The first sale is between the Sub-Vendor and SIEMENS in the Non-Odisha States covered under the provisions of Section 3(a) of the Central Sales Tax Act and relevant Sales Tax has been paid by the Sub-Vendor at a concessional rate in the State from where the goods have commenced their Inter-State journey. That since these are contracted goods i.e. specific, ascertained and tailor-made good as per specifications mentioned in the pre-existing contract between the parties and moved from the NON-ODISHA State into the State of Odisha, they are clearly Inter-State Sales under the provisions of Section 3(a) of the Central Sales Tax Act, 1957 and the State from where the goods commenced their Inter-State journey will be the appropriate State to levy and collect the Central Sales Tax and therefore the Central Sales Tax at a concessional rate is rightly paid in the State from where the goods commenced their Inter-State journey. That while the goods are in movement from the Non-Odisha State into the State of Odisha, the petitioner i.e. the first purchaser sells the goods by transfer of documents of title to the goods i.e. the lorry receipt and delivery challan, and raises an invoice on the ultimate purchaser i.e. the CUSTOMERS and the said sale is a "subsequent sale" and therefore the second sale is exempted from being taxed further under the provisions of Section 6(2) of the Central Sales Tax Act, 1956. The invoices raised by the petitioner on the ultimate purchaser i.e. the CUSTOMERS is as per the rates or values of specific goods as detailed out in the pre-existing contracts between the parties because of the fact that specific/contracted goods have a specific/contracted price for it. The petitioner will not be able to charge a higher price other than what is mentioned in the contract. The goods enter into the State of Odisha in the Way Bill of the ultimate purchaser i.e. the CUSTOMERS and the aforesaid ultimate purchaser/CUSTOMERS pays the Entry Tax inside the State of Odisha on the said goods for causing entry of goods into the State of Odisha and the said Entry Tax has been rightly levied and collected by the State of Odisha from the CUSTOMERS.(e) It can never be said that the equipments manufactured by the approved Sub-Vendor/Sub-Supplier of SIEMENS and the items supplied by SIEMENS to the CUSTOMERS are two different items because if that be so and if the goods are not a part of the contracted goods, then the CUSTOMERS will not accept the same and will neither make payment of the price and neither issue a C Form to SIEMENS and therefore in other words the said equipments supplied are specific goods manufactured in pursuance to the pre-existing contracts between the CUSTOMERS and SIEMENS and have been supplied by the Sub-Vendors to SIEMENS and thereafter by SIEMENS to the CUSTOMERS and the CUSTOMERS have made a payment of the invoice and issued 'C Form for the invoice value on SIEMENS. SIEMENS accordingly has issued a C Form to the Sub-Vendor and the Sub-Vendor to complete the transaction and for paying concessional rate of Central Sales Tax has issued a 'E-l' Form to SIEMENS. (Photocopy of two copies of all documents relating to the sales are enclosed herewith marked as Annexure -3 Series).(f) The petitioner submits that the contract between the Petitioner and the CUSTOMERS in the present case mentions only the broad headings of the equipments to be supplied. It does not mention each and every small item of equipments that is to be supplied. Therefore the invoice raised by the Sub-Vendor of the customer is a sub-heading item and in the invoices raised by the petitioner on the CUSTOMERS, the description of the item given is the broad heading item which finds place in the contract. Had it been some other goods which were supplied by the Sub-Vendor of the CUSTOMERS and the goods supplied by the petitioner on the CUSTOMERS were different, then the CUSTOMERS would not have accepted or received such goods and would not have paid the price of the goods to the petitioner, nor given a 'C declaration form giving the invoice value of the petitioner's invoice on the CUSTOMERS. There is also sufficient proof that the CUSTOMERS have actually received and paid for a specific tailor-made goods as per the specifications mentioned in the contract because of the fact that the CUSTOMERS have brought the said goods on its own Way Bill and also paid Entry Tax on the said goods to the State of Odisha and which Entry Tax, the State of Odisha has duly received and accepted.(g) The petitioner hereby submits that as far as subsequent sales u/s. 6(2) of the Central Sales Tax Act is concerned, the only element to be seen is, as to whether there was a pre-existing contract, whether specific or tailor-made goods have moved from one State to another in pursuance to the pre-existing contract and whether there is a subsequent sale from the ultimate seller to the ultimate buyer by transfer of documents of title to the goods during the said movement. Once the aforesaid three conditions are fulfilled, the transaction will be a sale under section 3(a) of the Central Sales Tax Act and thereafter a subsequent sale under Section 6(2) of the Central Sales Tax Act and exempt from taxation under Section 6(2) of the Central Sales Tax Act. It is immaterial as to whether it is a belated transaction i.e. the time gap between the first invoice i.e. the invoice between the Sub-Vendor and SIEMENS and the second invoice i.e. the invoice between the petitioner and the CUSTOMERS, has a long time gap or there is an overlapping of those invoices in different assessment years and such vague reasonings cannot be taken into account for rejecting a sale u/s. 6(2) of the Central Sales Tax Act. 5. That the tax audit under Rule 10 of the CST (O) Rules was undertaken by the DCST Opp. Party No.4 in pursuance to a direction given by the assessing authority being the JCST Opp. Party No.3. While the audit was going on the DCST who was conducting audit had requested the petitioner to submit the certain documents which the petitioner produced and filed. Other than the aforesaid documents, the DCST never asked for the contract between the petitioner and the CUSTOMERS. The DCST has therefore stated about non-submission of declaration forms. (A photo copy of the HAZIRA is enclosed herewith and marked as Annexure-4 Series)6. Audit visit report communicated to the petitioner along with the notice in Form IV for assessment as a result of audit is witness to the fact that the AVR was not submitted in terms of Rule 10(3) of the C.S.T. (O) Rules. It has been laid down by this Honble Court in Jindal Stainless Ltd. Vrs. State of Odisha, (2012) 54 VST 1 (Ori) that if AVR is not submitted within the period stipulated under Section 41(4), the assessment under Section 42 is not sustainable in the eye of law. AVR being taken as the foundation for audit assessment under Rule 12(3) of the CST (O) Rules, the petitioner reasonably believes that the AVR had not been submitted within the period stipulated under Rule 10(3). ( A photocopy of the AVR in Form III AA as communicated to the petitioner along with notice in Form IV for assessment under Rule 12(3) of the CST (O) Rules is enclosed herewith as Annexure-5)7. A glance at the notice in Form IV in Annexure-5 reveals that the said notice was issued on 28.04.2014 fixing date of appearance and production of records on 30.05.2014. It is asserted by the petitioner that the said notice having been tendered on the Advocate, on 30.04.2014 the notice itself is invalid being served on improper person. By the date the notice was served on the advocate, the company did not appoint him to plead on its behalf. Therefore, in view of ratio laid down in Manekia Vrs. Commissioner of Sales Tax, (1977) 39 STC 426 (Bom) and Srikanth Trading Co. Vrs. State of Andhra Pradesh, (1998) 109 STC 590 (AP) that service of notice on person not authorised is invalid.8. That as the authority failed to adhere to statutory requirement contained in Rule 12(3)(c) of the CST (O) Rules, the assessment proceeding is vitiated. It has been stipulated under the said rule that the assessing authority was duty bound to specify thirty days for production of relevant books of account and documents. The words not less than employed in Rule 12(3)(c) of the CST (O) Rules make it clear that the assessing authority at any rate is not authorized to reduce the period of thirty days. Since the authority had served the notice the Advocate on 30.04.2014 (who was not authorized to act on behalf of the company-petitioner as on 30.04.2014) directing the assessee-petitioner to appear and produce the books of account and documents on 30.05.2014, he has clearly transgressed his jurisdiction in proceeding with the assessment. The notice could have been served on the petitioners branch office at Rourkela for reasons best known to the JCST the same was served on the advocate. In terms of decision rendered by this Honble Court in the case of Patitapaban Bastralaya Vrs. Sales Tax Officer, 2015 (I) OLR 183 and Delhi Footwear Vrs. Sales Tax Officer, (2015) 77 VST 146 (Ori), the assessment order is liable to be quashed.

9. That the JCST assumed jurisdiction in utter violation of principles of natural justice. Reading of opening paragraph of the AVR in Form VAT-303 [which forms part of writ application relating to challenge made against assessment order passed under the OVAT Act] would reveal the following: and Letter No.8568/CT, dated 26.03.2013 and subsequently communicated by the JCCT, Sundargarh Range, Rourkela communicated vide Letter No.1479(2)/CT, dated 31.05.2013. Rule 10 of the CST (O) Rules read with Section 41(2) of the OVAT Act speaks that after identification of dealers for tax audit, the Commissioner is required to direct tax audit in respect of such dealers to be conducted. The Commissioner, in exercise of power conferred on him under Section 5 of the OVAT Act, vide Notification bearing No. 6780-V(VI)-53/2005-CT., dated 06.04.2009 delegated his power under Section 41(2) to the Joint Commissioner of Sales Tax. (Photocopy of the AVR under the OVAT Act is enclosed herewith marked as Annexure-6)10. The opening paragraph of the AVR as quoted above read with the aforesaid notification shows that the Joint Commissioner of Sales Tax has exercised his power under Section 41(2) of the OVAT Act and directed the audit team to conduct the tax audit of the petitioner-company. Since the Joint Commissioner of Sales Tax had been involved in the process of audit, in view of decisions of this Honble Court in Tata Sponge Iron Ltd. Vrs. Commissioner of Sales Tax, (2012) 49 VST 33 (Ori) and ABB Ltd. Vrs. State of Odisha, (2015) 77 VST 124 (Ori), the said officer-opposite party No.3 was not competent to take up and conclude the assessment order under Section 42.11. That the petitioner asserts that even though there was no categorical observation or allegation made in the AVR as regards transactions effected by the petitioner in terms of Section 6(2) of the Central Sales Tax Act, 1956 [CST Act for brevity], the Joint Commissioner of Sales Tax with an oblique bent of mind to disallow the entire transaction covered under Section 3(b) read with Section 6(2) of the CST Act and raise huge astronomical demand traversed beyond the terms of AVR.At this juncture it may be necessary to have a glance at paragraph 15 of the AVR in Form VAT-303 which reads as follows: In addition to this the dealer failed to furnish the required Form E-I certificates at a time in support of the sale effected under Section 6(2) of the CST act which may be treated as VAT sales12. In the AVR in Form IIIAA no allegation has been made against the claim of exemption under Section 6(2) except making an observation that the dealer partly could not furnish E-1 Forms.13. It is humbly submitted that the suggestion of the audit team is without comprehension either of the law or of the fact. Conceding for the sake of argument, if a transaction of sale effected from outside the State of Odisha is not disputed and pursuant to agreement with the CUSTOMERS with the present petitioner is not in dispute, the transaction disclosed as falling within the scope of Section 6(2) of the CST Act on its rejection can only be comprehended within the ken of Section 3(a) of the CST Act.14. The dealer-petitioner also in its explanation clearly stated which was recorded by the assessing authority in the following words [see assessment order under the OVAT Act]: In regard to above allegation, it is explained that non-submission of E-I certificate relates to tax exempted sale under Section 6(2) of the CST Act wherein the goods have been dispatched directly from outside the State to the ultimate buyers of Odisha State on the strength of the way bill in Form VAT-402 issued by the purchaser. Hence, the transaction being in course of inter-State trade or commerce, taxing of the same under the State Act in the hands of the company is illegal and arbitrary.15. The dealer-company as regards transactions covering Section 6(2) of the CST Act explained and placed all relevant materials to show that the vendors of the petitioner commenced movement of the goods required to be supplied to the CUSTOMERS [which movement triggered by virtue of agreement between the CUSTOMERS and the petitioner-company] which is first inter-State sale falling within Section 3(a) of the CST Act and thereafter during such movement second inter-State sale was effected by the petitioner to the contractee by way of endorsement and the way bills were issued by the contractees for transportation of the goods moved from outside the State of Odisha to its place of business. These documents, even though without any ambiguity, led to show that the transactions in question very well fall within scope of Section 6(2), the Joint Commissioner of Sales Tax, opposite party No.3 acted in complete defiance of law and being swayed away by the suggestion of his subordinate officers made in AVR, held that the transactions would be exigible to sales tax under the OVAT Act.The conclusion arrived at by the opposite party No.3 is fallacious and irrational particularly when it is not disputed that the waybills were given by the CUSTOMERS for taking delivery at their end.16. That the petitioner after entering into agreement(s) with CUSTOMERS placed purchase orders on different vendors outside the State of Odisha and instructed them to dispatch the goods directly to the above CUSTOMERS who would furnish way bills. At paragraph 5, page 19 of the assessment order under the OVAT Act it has been observed as follows:All lorry receipts meant for loading of goods and commencement of 1st inter-State movement were issued for direct delivery of goods at the work site of the ultimate purchaser inside the State of Odisha in the account of the instant dealer and there was no endorsement made by the buyer i.e. instant dealer on the L.R. transferring title to goods in favour of ultimate purchaser.17. The assessing authority was under the misconception that transfer of document of title can only be by endorsement in lorry receipt. This conclusion would be contrary to the provisions of the Sale of Goods Act. When the finding is that the delivery inside the State of Odisha would be taken at the site of the ultimate purchaser, there is no scope for entertaining any doubt that the entire transaction is inter-State sale. The very same goods while being in transit were diverted to be taken into the mass of the goods of the CUSTOMERS. The fallacy in finding of fact is apparent when the following reasoning of the assessing authority is read page 16 para (vii) of the assessment order under the OVAT Act) TO QUOTEVerification of documents reveals that the dealer-company has purchased goods from outside the State on its own account, transported the same into the State of Odisha as its own goods without any change of ownership or change in the documents of title to goods and has sold the same to different customer inside the State of Odisha acting as an agent or dealer and principal to the buyer inside the State. Hence, being an agent like factor or pakka adatiya or dealer between the outside seller and ultimate purchaser, it is liable to pay VAT on the said sale of goods.UNQUOTE.18. Though the assessing authority found that the dealer-petitioner was agent, and he did not dispute the movement of goods from outside the State of Odisha and accepted that CUSTOMERS have furnished waybills for movement of goods directly to their premises for taking delivery, the opposite party No.3 failed to appreciate the fact that the inter-State journey of the goods could only be terminated in the premises of the CUSTOMERS. The assessing authority fell in error of law by levying tax under the OVAT Act on these transactions. 19. That since no allegation was contained in the AVR with regard to suggestion to disallow transactions covered under Section 6(2) of the CST Act, the assessing authority unilaterally without calling for any show-cause from the petitioner should not have jumped to the conclusion and rejected the claim of the petitioner. The assessing authority could not have proceeded to record finding and examine such fact which was not contained in the AVR in view of principle stated in Bhushan Power & Steel Ltd. Vrs. State of Odisha, (2012) 47 VST 466 (Ori).20. The notice for assessment contained only AVR allegations which were explained by the dealer-petitioner to the assessing authority. The assessing authority could not take up and decide the issue which was not put to the notice of the petitioner. Nowhere in the assessment order the reason for rejection of claim of sale under Section 6(2) of the CST Act has been stated by the assessing authority. There has been blatant infringement of natural justice while raising huge arbitrary and whimsical demand.21. That it is humbly submitted that the assessing authority proceeded on presumptions and conjectures without bringing on record analysis of each and every transaction. The assessing authority has accepted the position that the name of place located outside the State from which goods are consigned and the final delivery address of the last purchaser inside the State of Odisha are mentioned on the lorry receipt (see page 19 of assessment order under the OVAT Act). This is clear indicative of the fact that the transactions are inter-State in nature. Even if the transactions are held to be out of the purview of Section 3(b), the same would at best fall within the scope of Section 3(a) of the CST Act, but nevertheless would be encompassed within the OVAT Act.22. That the determination of tax liability under the OVAT Act vis--vis the transactions disclosed under Section 3(b) read with Section 6(2) of the CST Act shows that the assessing authority committed grave error of procedure leading to infer that he was committed to tax the transactions under the local sales tax law. At page 6 of assessment order passed under the CST Act it is stated as follows:The 2nd and 3rd allegation made in the AVR having been dealt in separately and discussed in detail in the assessment order passed today under the OVAT Act and OET Act, there is no need to discuss the same again in this order23. It may be pointed out from the assessment order under the CST Act that allegation Nos.2 and 3 are that out of claimed transactions under the purview of Section 6(2), the petitioner could not furnish certain certificates in E-I and transactions relating to McNally Bharat disclosed under Section 6(2). The allegations do not contain that total rejection of claim of exemption under Section 3(b) read with Section 6(2) of the CST Act.24. The observation of the assessing authority in the assessment order under the CST Act indicates that he took the view to add the turnover representing transactions disclosed under Section 3(b) read with Section 6(2) of the CST Act in the assessment under the OVAT Act. In other words, the assessing authority had passed order of assessment under the OVAT Act first by assessing the tax liability in respect of transactions shown under Section 3(b) read with Section 6(2) of the CST Act. Therefore, it is urged that prior to rejection of transactions falling within the scope of Section 3(b) read with Section 6(2) of the CST Act, the assessing authority could not have taken the said turnover into the assessment under the OVAT Act. 25. This fact is amply clear from the orders dated 17.01.2015 and 20.02.2015 maintained in the order-sheet. The following orders are passed on the aforesaid two dates:17.01.2015:The learned advocate of the dealer company appeared today, filed hazira, produced declaration forms in F and EI parts, and stated that they have not received the balance declaration in Form C and EI from the purchaser and sellers respectively till date. It is also requested to conclude the assessment proceeding on the basis of documents produced and statutory declaration already furnished. Accoreingly, the cases were heard. It is admitted that they have no more explanation to offer other than those explained in the written submission. It is also admitted that no books of accounts to record expenditure incurred on account of labour and service charges manufactured for which they have deducted the amount towards labour and service charges following the percentage fixed as per appendix to Rule 6(e) of OVAT Rules. Put up for detail study and passing of assessment order under the OVAT Act, CST Act and OET Act.Sd/-17.01.201520.02.2015:Called for the records, gone through the AVR submitted by the DCST, Audit, RKL-Ii Circle under OVAT Act, OET Act and CST Act. Examined the written submission submitted by the learned advocate of the dealer company explaining the discrepancies pointed out in the AVRs. The documents submitted at the time of audit and at the stage of hearing were examined thoroughly. The declaration forms in EI and EII worth Rs.81,51,86,787/- and C form covering transaction worty Rs.126,07,54,920.00 and F Forms for Rs.3,77,37,614.00 furnished in original till 17.01.2015 were examined. The dealer company failed to furnish EI and EII declaration forms covering transaction worth Rs.235,16,38,408/, C form covering transaction worth Rs.288,94,73,539/- and F Form covering transaction worth Rs.12,14,18,185.00, in original for the period under audit, despite availing adequate opportunities. The documents produced in support of claim of exemption under Section 6(2) of CST Act were verified and it was found that the documents of title to goods in each transaction had not been transferred during the movement of goods from one State to another. Close scrutiny further revealed that the dealer company after taking delivery of the goods from the carriers inside the State of Odisha had forwarded the LRs, inter-State invoices, delivery notes to the ultimate purchasers inside the State of Odisha. The details in this regard have been discussed in the assessement orders passed separately under the OVAT Act, OET Act and CST Act. The dealer company has also failed to furnish declaration Form F in support of claim of dispatch of goods worth Rs.12,14,18,185/- to its branches located outside the State. The dealer company admitted to have not maintained books of accounts to record expenditure incurred towards labour and service charges in regard to execution of civil works. Considering all the aspects assessment order under the OVAT Act, OET Act and CST Act passed today raising demand amounting to Rs.180,71,64,744/-, Rs.21,12,43,767/- and Rs.5,26,05,784/- respectively. Issue assessment orders and demand notices under the above Acts.Sd/-20.02.2015[Emphasis laid on the bold letters]26. That while the former order dated 17.01.2015 would indicate that the assessing officer reserved the matter for further study, the latter order dated 20.02,2015 shows that jumping to the conclusion by rejecting the transactions claimed exempted under Section 3(b) read with Section 6(2) of the CST Act. It is apparent from both the orders quoted above would show that after examining the documents produced by the dealer-petitioner, the assessing officer formed an opinion to reject the claim of the petitioner under Section 3(b) read with Section 6(2). The assessing authority has rejected the claim of exemption under Section 3(b) read with Section 6(2) without affording any opportunity after 17.01.2015.27. Thus, the petitioner had had no opportunity to read the mind of the assessing authority to rebut and/or explain before him. The view taken by the assessing authority to reject the transactions under the CST Act and add the same to the OVAT Act was behind the back of the petitioner. At this juncture, the petitioner seeks to rely on the principle stated by this Honble Court in the context of rejection of transactions under Section 3(b) read with Section 6(2) of the CST Act and addition of the said transactions under the OVAT Act in Siemens Ltd. Vrs. State of Odisha, W.P.(C) No.10467 of 2004, disposed of on 23.11.2004.28. That out of the aforesaid contracts, the Joint Commissioner of Sales Tax( hereinafter for short mentioned as JCST), O.P.No.3 in his order of assessment passed under the Central Sales Tax Act, has taken into account the contracts between the petitioner and the CUSTOMERS. He has not dealt with any other particular contract between the petitioner and the CUSTOMERS. The JCST in his order of has given reasonings for rejecting the claims of the turnover of sales under Section 6(2) of the Central Sales Tax Act made by the petitioner to its CUSTOMERS and has not given any reasonings as far as the sales under Section 6(2) of the Central Sales Tax Act made by the petitioner to the other aforesaid CUSTOMERS, drawing an inference that the contractual clauses of the contract between SIEMENS and all its CUSTOMERS are all identical. However the admitted fact is that the Assessing Authority has accepted the first sale under section 3(a) of the Central Sales Tax Act and has also accepted that the goods have moved in pursuance to pre-existing contracts from one State to another i.e. from a NON-ODISHA State into the STATE OF ODISHA.

29. That the assessing authority should have also gone into each and every contract between the petitioner and its CUSTOMERS and should have arrived at specific findings in respect of each and every contract instead of generalizing the issue by combing all the contracts. The JCST had never directed for production of all the contracts between the petitioner and its CUSTOMERS, but had requested the petitioner to submit copies of three to four contracts which the petitioner filed. (Photocopy of Haziras are enclosed herewith marked as Annexure-7). The same is against the view laid down by the Honble Court in the case of Bhushan Steel and Strips Ltd. Vs State of Orissa & Others. (Orders dated 06.03.2007 and 30.06.2009 in W.P. (C) No.2442 of 2007).

30. That it is humbly submitted that Section 6(2) of the CST Act provides that sales subsequent to an inter-State sale is exempted from being levied with tax. The said sales should be supported by transfer of documents of title to the goods during the movement. Section 2(4) of the Sale of Goods Act permits transfer of goods by endorsement or delivery of documents of title. The documents of title of goods can be transferred by mere delivery or by endorsement on document. Section 6(2) provides that in order to claim the exemption there under certificate in the prescribed form was required to be obtained from the registered dealer. It is not disputed or denied by the assessing authority that in most of the transactions claimed to be covered under Section 3(b) read with Section 6(2), there existed required certificates. In the present case, all the conditions for valid transit sale is fulfilled by the petitioner-company. The petitioner-company has also produced the required declaration certificates in respect of most of the transactions before the assessing authority during the course of audit as well as assessment. The denial of benefit without analyzing the fact and repercussion that the registered dealer situated outside the State had furnished details of transactions to their respective assessing authorities claiming the same to be falling under Section 3(b) read with Section 6(2) of the CST Act. In the similar way, the CUSTOMERS (situated within the State of Odisha) have disclosed the transactions in their respective returns. The State of Odisha cannot be benefited doubly by the same transactions.31. That the impugned assessment order passed by the opposite party No.3 levying tax and huge penalty under the OVAT Act after rejecting the claim of in-transit sale under the CST Act suffers from want of jurisdiction in applying the test of passing of property. The assumption of jurisdiction by the assessing authority under the OVAT Act by deleting the transactions from the CST Act is wholly irrelevant and contrary to mandate of Article 286 of the Constitution of India read with Section 4 of the CST Act.32. That the order of assessment is replica of other assessment order(s) passed in respect of other dealers-assessees. The facts of other dealers were not akin to that of the present transactions of the petitioner. Therefore, such copied assessment should be quashed as non-est in the eye of law.33. That the penal provision contained in Rule 12(3) of the CST (O) Rules being confiscatory in nature, even though there was bona fide claim of exemption under the CST Act, imposition of penalty without leaving any discretion for the assessing authority to apply his mind to particular fact situation offends Article 14 and infringes mandate of Article 19(1)(g) of the Constitution of India.34. That when the opposite parties have not disputed the figures disclosed in the returns and the said returns were accepted as self-assessed, it is apparent that the department had been accepting the mode of transactions and claim of exemption under Section 3(b) read with Section 6(2) of the CST Act. Therefore, taking up assessment for a period of two years and imposing penalty for the entire two years would militate against the basic tenets of law, i.e., reasonableness, rational application of mind and judicial approach. This Honble Court may warrant interference with the offensive assessment order to uphold the majesty of justice, equity and good conscience. 35. That when the transactions were reflected in the returns furnished under the provisions of the CST Act, there was no scope for imposition of penalty under Section 42(5) of the OVAT Act. When there is dispute as to the claim of benefit and nature of transactions and there is no allegation of transactions being out of account, no penalty should have been imposed mechanically. In this respect Sree Krishna Electricals Vrs. State of Tamil Nadu, (2009) 23 VST 249 (SC) and Commissioner of Central Excise & Customs Vrs. Aditya Alloys Limited, 2014 (I) ILR - CUT- 401.36. That the order of assessment appears to have suffered from vice of limitation as the same is not passed within the period stipulated under Rule 12(3)(h) of the CST (O) Rules. Notice in Form IV having been issued on 28.04.2014, the assessment order was required to be passed within six months. The assessment order does not whisper as to whether the assessing authority has invoked terms of proviso to clause (h) of sub-rule (3) of Rule 12.37. That it is further humbly submitted that the action of authority-opposite party No.3 is arbitrary, irrational and cannot be held to be tenable in the eye of law.38. That though alternative remedy is provided under Section 9 of the CST Act read with Section 77 of the OVAT Act to challenge the assessment order, since there has been violation of principles of natural justice and the assessment order is barred by limitation, and that the assessing authority has acted without jurisdiction, the petitioner has approached this Honble Court by way of writ petition.39. That the petition is made bona fide.

P R A Y E R

It is therefore prayed that this Honble Court may graciously be pleased to issue notice; after hearing both sides allow this petition, And issue writ of certiorari quashing the assessment order in Annexure-1;And issue writ of mandamus quashing the order of assessment and demand notice in Annexure-1;And for this act of kindness, the petitioner, as in duty bound, shall everpray.C U T T A C K By the petitioner throughDate: 23.03.2015 A D V O C A T E