Judgment:
A. Pasayat, J.
1. Petitioner calls in question the legality of order passed by the Sales Tax Officer, Sambalpur III circle rejecting its application for refund made under Section 14 of the Orissa Sales Tax Act, 1947 (in short, 'the Act') on the ground that the amount to be refunded has been withheld by the Commissioner of Sales Tax, Orissa, by his order in terms of Section 14-D of the Act. As the said order of Commissioner was not annexed to either the writ application or the counter-affidavit filed by opposite parties, production of relevant records was directed. Records were produced by the learned counsel for the Revenue for our perusal.
The relevant orders as appear from the records passed by the authorities including that of the Commissioner read as follows :
'Preceding notes.
The first appeal order dated January 16, 1995 from which refund flows is the subject-matter of second appeal filed by the State. In view of the amount of security available with the department, in case the second appeal order goes in favour of the State it would be difficult for collection of sales tax dues now claimed towards refund by the dealer. Thus the nature of case attracts the provision for withholding of refund under Section 14-D of the Orissa Sales Tax Act. Accordingly on the basis of proposal of the A.C.C.T., Sambalpur range at page 2/c refund of Rs.11,09,682 for the year 1992-93 under the Orissa Sales Tax Act in case of M/s. Gannon Dunkerly & Co. Ltd., SAIII-1685 may be withheld till the disposal of second appeal filed by the State.
sd.A.C.C.T.(TRS)27.3.1996Addl. C.C.T. (NZ)
The notes from pre-page explains the position. The refund may be withheld as proposed at 'X'.
sd.29.3.1996Commissioner
For the aforesaid reasons the amount is withheld. sd.9.4.1996'
2. From the counter-affidavit filed, we find that the reasons which weighed with the authority for withholding the refund are as follows :
'....The creditworthiness of the petitioner in the market is not known and it is not known whether there was chance of recovery of tax in case ultimately the cases are decided in favour of the Revenue. Further the details of movable and immovable property of the petitioner-dealer was not available to the Sales Tax Department. The Commissioner deemed fit to withhold the refund in exercise of the jurisdiction conferred under Section 14 D of the Orissa Sales Tax Act............................. The proposal was accompanied by a prescribed proforma containing details regarding the dealer. It has been mentioned therein that the dealer is not a permanent resident of the State of Orissa, that there is every possibility of the dealer shifting the place of business outside the State, his credibility in the market was not known, the security deposit available with the department is only Rs. 3;500 the details of movable and immovable property of the dealer was not available with the department and his business antecedents were such that it might not pay the dues, if called upon to do so subsequently.'
3. According to learned counsel for petitioner, the order is indefensible as the requirements of Section 14-D of the Act have not been complied with. It is submitted by learned counsel for the Revenue that mention of withholding under Section 14-D of the Act is sufficient.
4. For bringing in operation of Section 14-D of the Act, condition precedent is that the Commissioner should be of the opinion that grant of refund is likely to adversely affect the Revenue. The provision reads as follows :
'14-D. Power to withhold refund in certain cases.--Where an order giving rise to a refund is the subject-matter of an appeal or further proceeding under this Act, the Commissioner may, if he is of the opinion that the grant of refund is likely to adversely affect the Revenue, withhold the refund till such time as he deems proper.'
Opinion has to be formed and recorded before refund is directed to be withheld. On verification of records we find that no such opinion has been recorded by the Commissioner. Mere reference to Section * 14-D of the Act would not suffice because statutory mandate is that the Commissioner must be of the 'opinion' that grant of refund is likely to adversely affect the Revenue. Opinion cannot be in vacuum. It has to form part of records.
5. 'Opinion' means something more than mere retailing of gossip or of hearsay ; it means judgment or belief, that is a belief or conviction resulting from what one thinks on a particular question. (See Dolagobinda Paricha v. Nimdi Charan Misra AIR 1959 SC 914). It means 'judgment or belief based on grounds short of proof. (Concise Oxford English Dictionary). If a man is to form an opinion and his opinion is to govern, he must form it himself on such reasons and grounds as seem good to him. [Per Lord Bramwell in Allcroft v. London (Bishop) : (1891) AC 666] Merely filing of appeal or pendency of further proceeding under the Act cannot per se be a ground for withholding refund. Additionally, the Commissioner has to be of the opinion that grant of refund is likely to adversely affect the Revenue.
6. It is fairly accepted by the learned counsel for Revenue that petitioner is one of most reputed concerns of the country. His stand is that creditworthiness is different concept from reputation as a leading concern. It is also fairly accepted that the petitioner was not granted any opportunity to show its creditworthiness. It is true as pointed by the learned counsel for Revenue, a pre-decisional hearing is not warranted when the Commissioner proposes to act in terms of Section 14-D of the Act, But at the same time the desirability of it being in possession of all relevant materials which would weigh with him while taking a decision cannot be lost sight of. No attempt appears to have been taken to get the relevant information. When an opinion is formed about creditworthiness of a person relevant details have to be considered. In that case, the concerned party can be asked to provide details. Whether the details are complete and/or acceptable is another aspect. But without making any enquiry whatsoever about creditworthiness of a person, formation of an opinion cannot be a legitimate exercise. In the circumstances, we set aside the impugned order and remit the matter back for fresh consideration by the Commissioner, which shall be done within one month.
7. Learned counsel for petitioner has furnished certain details/ statements to prove that the petitioner is a concern of financial stability and there can be no doubt about its creditworthiness. If the petitioner is so advised, it may supply details about its financial stability to the Sales Tax Officer and/or Commissioner within ten days from today. While taking a decision on the refund application and deciding about creditworthiness, consideration of the question whether grant of refund would adversely affect the Revenue shall be done by the Commissioner.
The writ application is disposed of accordingly.
S.C. Datta, J.
8. I agree.