2009 (6) TMI 957 - HC - VAT and Sales Tax

Arrears of tax and penalty relating to the assessment years 1998-99 and 2001-02 - whether service of notice is not made as contemplated under rule 52(1) of the Tamil Nadu General Sales Tax Rules, 1959? Held that - Nowhere, either in the Tamil Nadu General Sales Tax Act or in the Rules, service of notices at the residential address is mandated. If the address of the dealer is known to the assessing authority, the mode of service would be registered post or if none of the modes is practicable, the affixture in some conspicuous place at the last known place of business or residence is the proper mode of service. In this case, after passing of the final orders, the same were served on the assessee on February 28, 2004 and June 7, 2003 respectively by way of affixtures. Therefore, service of notices was done by following rule 52(1)(c) and (d), which could be sufficient service, thus do not find any infirmity in the mode of service. As such, the writ petitions fail and stand dismissed.

Summary

Issues:
1. Proper service of notice as per rule 52(1) of the Tamil Nadu General Sales Tax Rules, 1959.

Analysis:
The petitioner filed writ petitions seeking to quash the demand notice for arrears of tax and penalty for the assessment years 1998-99 and 2001-02, citing improper service of notice. The petitioner argued that due to business closure and lockout, notices should have been served at the partner's residential address. However, the government advocate presented records showing that pre-assessment notices were served through affixtures at the business premises and by registered post. The final assessment orders were also served through affixtures. The court noted that service of notices was done in compliance with rule 52(1)(c) and (d), which require sending notices by registered post or affixing them at the last known place of business or residence. The court emphasized that the law does not mandate serving notices at residential addresses if the dealer's address is known to the assessing authority.

2. Validity of the assessment orders and appeal remedy.

The petitioner contended that improper service of assessment orders led to the loss of appeal remedy, rendering the orders time-barred. However, the court found that the petitioner had received the demand notice in 2005, which made them aware of the assessment orders. The court highlighted that the petitioner did not avail the appellate remedy despite having the opportunity to appeal before the Appellate Assistant Commissioner of Commercial Taxes. As a result, the assessment orders had attained finality. The court concluded that there was proper service of notices and dismissed the writ petitions. An interim stay granted earlier was lifted, allowing the respondent to recover the balance amount demanded in the order. The petitioner was given a month to pay the remaining amount. The writ petitions were dismissed with no costs.