2011 (1) TMI 1261 - HC - VAT and Sales Tax

When an appeal in MTA No. 106 of 2008 filed by the petitioner in regard to the levy of tax of ₹ 77,656 (rupees seventy seven thousand six hundred and fifty six only) and the penalty levied for ₹ 92,568 (rupees ninety two thousand five hundred and sixty eight only) are pending before the Sales Tax Appellate Tribunal, (AB) Madurai, then it is not open to the second respondent/Deputy Commercial Tax Officer, Virudhunagar, to issue prerevision notice dated April 24, 2008 in reference Asst. No. 5720959/97-98 and the same is per se illegal in the eye of law. Held that - Inasmuch as the appeal filed by the petitioner in MTA No. 106 of 2008 before the Sales Tax Appellate Tribunal (AB), Madurai is pending as on date and since the same has not been disposed of till date, this court is of the considered view that it is not open to the second respondent/Deputy Commercial Tax Officer I, Virudhunagar, to issue the pre revisional notice dated April 24, 2008 claiming tax due on the wilful non-disclosure at ₹ 77,656 and the penalty proposed at 150 per cent as per section 16(2) of the Act at ₹ 1,16,484 and the same is per se illegal and invalid one. Resultantly, this court exercises its inherent power under writ jurisdiction and sets aside the pre-revision notice dated April 24, 2008 issued by the second respondent and allows the writ petition to prevent an aberration of justice.

Summary

Issues:
1. Challenge to the pre-revision notice issued by the Deputy Commercial Tax Officer.
2. Dispute over the levy of tax and penalty.
3. Maintainability of the writ petition against the pre-revision notice.

Analysis:
1. The petitioner filed a writ petition seeking a writ of certiorari to challenge the pre-revision notice issued by the Deputy Commercial Tax Officer. The petitioner had appealed against the revision orders passed by the assessing officer, which were dismissed by the Appellate Assistant Commissioner. The petitioner also disputed the tax and penalty levied. The Government Advocate argued that the writ petition was not maintainable as the appeal before the Sales Tax Appellate Tribunal was pending, and only a pre-revision notice had been issued. However, the petitioner contended that the pre-revision notice was illegal as the appeal was pending, making it impermissible for the Deputy Commercial Tax Officer to issue the notice.

2. The pre-revision notice mentioned the levy of penalty under section 16(2) of the TNGST Act, 1959, for wilful non-disclosure of assessable turnover. The assessing authority justified the penalty based on the suppression of assessable turnover. However, the penalty was set aside for not being in accordance with the law and remanded for fresh disposal. The notice proposed a penalty of Rs. 1,16,484 for wilful non-disclosure of taxable turnover, along with the tax due of Rs. 77,656. The Deputy Commercial Tax Officer's actions were deemed illegal by the court due to the pending appeal before the Sales Tax Appellate Tribunal.

3. The court, exercising its inherent power under writ jurisdiction, set aside the pre-revision notice, deeming it illegal and invalid. The court allowed the writ petition to prevent an aberration of justice, ultimately ruling in favor of the petitioner and quashing the notice issued by the Deputy Commercial Tax Officer. The writ petition was allowed, the order of the Deputy Commercial Tax Officer was set aside, and no costs were awarded. The connected miscellaneous petition was closed as a result of the judgment.