2009 (3) TMI 929 - HC - VAT and Sales Tax

Revenue recovery - whether notice of demand did not accompany exhibit P3? - Held that - Learned counsel for the petitioner is right when she submits that recovery proceedings ought not to have been initiated till a notice of demand is served and time was granted to the assessee to pay the same. In the result after hearing counsel on both sides the writ petition is disposed of directing the first respondent to serve on the petitioner a notice of demand pursuant to exhibit P3 within a period of two weeks from the date of receipt of a copy of this judgment. Thereupon it is open to the petitioner to move an application for stay before the appellate authority.

Summary

The Kerala High Court issued an order in relation to an assessment year under the Central Sales Tax Act, 1956. The petitioner contested the assessment, claiming that a notice of demand was not provided with the assessment order. The court directed the first respondent to serve a notice of demand to the petitioner within two weeks, allowing the petitioner to apply for a stay before the appellate authority. The enforcement of the notice under the Revenue Recovery Act was suspended for two months. The judgment was delivered by C.N. Ramachandran Nair, with the State appealing against the order to issue a notice of demand for recovering arrears. The respondent filed an appeal against the assessment, leading to a revised assessment order and a subsequent rectification order demanding interest. The State argued that a fresh notice of demand was not required due to the rectification of the previous notice, which the court agreed with, allowing the State to treat the assessee as a defaulter for recovery purposes. The court dismissed the appeal and upheld the rectified order.