2009 (11) TMI 853 - HC - VAT and Sales Tax

Whether the second respondent has no jurisdiction to demand and collect any amount of tax inasmuch as he is not the assessing authority as defined under section 2(5) of the Tamil Nadu Value Added Tax Act 2006? Held that - At this stage of hearing of the writ petition the learned counsel appearing on behalf of the petitioner had submitted that it would suffice if the second respondent is directed to dispose of the representation of the petitioner dated October 27 2009 on merits and in accordance with law within a specified time fixed by this court after giving an opportunity of the hearing to the petitioner. He had also prayed that till the second respondent disposed of the representation of the petitioner dated October 27 2009 the second respondent may be directed not to deposit the cheques issued by the petitioner on October 8 2009. Thus the second respondent is directed to dispose of the representation of the petitioner dated October 27 2009 on merits and in accordance with law within a period of four weeks from the date of receipt of a copy of this order after giving an opportunity of hearing to the petitioner. Further the second respondent is also directed not to deposit the cheques bearing cheque Nos. 985128 985129 985130 985131 before disposing of the representation of the petitioner dated October 27 2009 as directed by this court.

Summary

Issues: Jurisdiction of assessing authority, Collection of tax by second respondent, Writ of mandamus

Jurisdiction of Assessing Authority:
The petitioner, a registered dealer, filed a writ petition seeking a writ of mandamus to direct the second respondent to return cheques collected on October 8, 2009. The petitioner contended that the second respondent, who demanded tax during an inspection, lacked jurisdiction as the assessing authority. The petitioner argued that only the first respondent, under section 22 of the Value Added Tax Act, had the authority to assess and collect tax. The court noted the jurisdictional issue and directed the second respondent to dispose of the petitioner's representation within four weeks, giving an opportunity for a hearing.

Collection of Tax by Second Respondent:
During an inspection on October 8, 2009, the second respondent, based on a perceived suppression of facts, directed the petitioner to pay tax on a turnover amount, collecting cheques and a composition fee. The petitioner challenged this action, asserting that the second respondent lacked the authority to demand and collect tax. The court acknowledged the petitioner's argument and directed the second respondent to refrain from depositing the collected cheques until the representation was disposed of in accordance with the law.

Writ of Mandamus:
The court, considering the submissions from both parties, ordered the second respondent to address the petitioner's representation and refrain from depositing the collected cheques until the matter was resolved. The court disposed of the writ petition with these directions, emphasizing that the second respondent must act within the specified time frame and provide a hearing to the petitioner. The judgment highlighted the importance of adhering to legal procedures and ensuring that tax collection actions are carried out by the appropriate authority.