Judgment:
A. Pasayat, J.
1. Petitioner calls in question legality of order passed by the Assistant Commissioner of Sales Tax, Cuttack-II Range, Cuttack, purportedly under Section 23(4)(a) of the Orissa Sales Tax Act, 1947 (in short, 'the Act') read with Rule 80 of the Orissa Sales Tax Rules, 1947 (in short, 'the Rules'). By the impugned order, a combined order of assessment dated September 5, 1994, made by the Sales Tax Officer, Cuttack-II Circle, Cuttack, for the assessment years 1984-85 to 1998-91 were set aside, and direction was given for raising fresh demand for the said periods. Originally, assessments were made under Section 12(4) of the Act causing extra demands of tax. Petitioners questioned correctness of those orders of assessment before this Court in O.J.C. Nos. 1694 of 1986, 329 of 1987, 3772-3773 and 96 of 1988, 314 of 1990, 305 of 1991 and 2061 of 1992. Said writ applications were disposed of observing that no definite finding was recorded to show as to how transactions which were subjected to tax involved any transfer of right of user. Desirability and necessity to record such factual finding was highlighted by this Court in Kandoi Transport v. S.T.O., Assessment Unit, Barbil (O.J.C. Nos. 575, 577, 578 of 1988, disposed of on December 4, 1991 [1992] 43 STL 67). Assessments were set aside. Petitioner undertook to produce all relevant materials before the assessing officer to substantiate its stand that the transactions did not amount to sales : as it did not involve any transfer of right of user. It is to be noted here that petitioner is a manufacturer of aerated water and effects sale of aerated water in glass bottle containers, and fixed amounts are collected by it as rent for bottles and wooden cases. These amounts were treated to be taxable on the ground that they were not refunded to the retailers/wholesale dealers who purchased the drinks.
2. Pursuant to direction given by this Court, reassessment proceedings were initiated by the Sales Tax Officer, Cuttack-II Circle who held that there was no transfer of right of user and therefore, there was no scope for levying any tax. The Assistant Commissioner of Sales Tax, Cuttack-II Range, Cuttack, whose order is impugned in the present writ application, initiated a proceeding in terms of Section 23(4)(a) of the Act read with Rule 80 of the Rules, by his order dated September 28, 1995 and required the petitioner to produce books of accounts and other relevant documents. The matter was posted to October 30, 1995. The impugned order was passed primarily on the ground that relevant documents which were undertaken to be produced before the assessing officer, as evident from the order of this Court, were not so produced. Additionally it was observed that since relevant materials and documents were not produced as undertaken, proceeding was to be disposed of on the basis of materials available in the past assessment records.
3. Mr. B.K. Mohanty, learned counsel for petitioner submitted that there has been sheer abuse of process of law and the Assistant Commissioner without verification of records has proceeded on the basis as if documents and materials were not produced before the assessing officer pursuant to direction given by this Court notwithstanding undertaking given for production of documents and/or materials. Learned counsel for Revenue while supporting orders highlighted availability of an alternative remedy to contend that the writ application should not be entertained.
4. Normally we would not have interfered in a matter when an alternative remedy is available. Under Section 23(4)(a) an appeal is available to be made before the Commissioner. The conclusion of the Assistant Commissioner to the effect that documents were not produced for verification of the Sales Tax Officer seems to be erroneous. Records of the proceeding before Sales Tax Officer were produced before, us. On verification thereof, we find that in the hazira filed on July 18, 1994 and authorisation dated May 28, 1994 there is clear indication about production of books of accounts. Further the Sales Tax Officer in his order has indicated about production, of books of accounts and relevant documents. While initiating the proceeding, it was not indicated by the Assistant Commissioner as to what relevant documents/materials were not produced. Two reasons for initiation of the proceeding under Section 23(4)(a) read with Rule 80 have been indicated. They are (a) a single and solitary order was passed in respect of seven different financial years which is illegal, and (b) assessing officer did not properly examine each case in pursuance of the judgment of this Court, and learned Advocate had not produced all relevant documents and had not placed relevant materials as undertaken. This is clearly contrary to the observation made by the assessing officer in the assessment order. The Assistant Commissioner does not appear to have applied his mind. His observation to the effect that documents were not produced before the Sales Tax Officer notwithstanding undertaking given before this Court is a travesty of truth. He did not indicate what were the documents/materials which were not produced. A vague statement that relevant documents and/or materials were not produced is of no consequence. A proceeding under Section 23(4)(a) read with Rule 80 should not be initiated in a casual manner. It is permissible to be initiated only if it is considered by the concerned authority that an order passed is erroneous in so far as it is prejudicial to the interest of Revenue. It appears that the Assistant Commissioner was obsessed with the default of the petitioner in not producing certain details/statements before completion of original assessments made under Section 12(4) of the Act. He did not point out what documents/ materials were not produced when assessments were taken up pursuant to the direction given by this Court. Even in the notice issued to the petitioner nothing in that regard was indicated. It is to be noted that in order to sustain action under Section 23(4)(a) read with Rule 80, Revenue has to establish the two conditions enumerated in Rule 80, i.e., (a) order is erroneous, and (b) same is prejudicial to the interest of Revenue. The conditions are cumulative and existence of the former without the latter would not be sufficient. The first infirmity indicated by the Assistant Commissioner that a single and solitary order was passed for seven assessment years even if improper or irregular cannot per se be considered as prejudicial to the interest of Revenue. So an irrelevant aspect has weighed with the Assistant Commissioner. Therefore, we set aside his order and remit the matter back to him for fresh adjudication in accordance with law.
5. Learned counsel for the petitioner submitted that bias of Assistant Commissioner is apparent and petitioner does not expect a fair deal in his hands and the matter should be heard by another Assistant Commissioner. Learned counsel for Revenue submitted that an improper or inappropriate order does not necessarily show bias. May be that the Assistant Commissioner while acting bona fide has passed the impugned order improperly. But that should not be a ground for the case being taken up by another officer. Natural justice is founded on equity, impartiality, fair play, and extends to what are called legitimate hopes and aspirations. It is really nothing more than fair play in action. It is pervasive facet of secular law where a spiritual touch enlivens legislation, administration and adjudication, to make fairness a creed of life. Justice must be rooted in confidence, and confidence is destroyed when right minded people go away thinking : 'The Judge was biased' (per Lord Denning MR in Metropolitan Properties Co. (F.G.C.) Ltd. v. Lannon [1968] 3 All ER 304 [CA], An adjudicator like Ceaser's wife should be above suspicion, (per Bowen L.J., in Lesson v. General Council of Medical Education (1890) 43 Ch.D. 366. At the same time it should be remembered that mala fide is generally the last refuge of a losing litigant. Unnatural expansion of principles of natural justice without reference to administrative realities and other factors of a given case, can be exasperating. A balance has to be struck between real apprehension of bias and an imaginary ghost of bias. Let the Commissioner of Sales Tax consider desirability of continuance of the proceeding by another Assistant Commissioner. It would be appropriate if the proceeding itself is finalised early, preferably by the end of December, 1996.
The writ application is allowed to the extent indicated above. No costs.
A. Deb, J.
6. I agree.