2010 (2) TMI 1100 - HC - VAT and Sales Tax

Notice issued by the second respondent informing the petitioner that if the arrears of tax are not paid within seven days time action will be initiated under the Revenue Recovery Act with interest under section 24 of the Tamil Nadu General Sales Tax Act 1959. Held that - There is no dispute that for the period from 1978-79 to 1997-98 a huge amount of arrears of tax was assessed by the Department for the business carried on by the previous management. In the absence of documents as stated tay the petitioner certainly it is not possible for the petitioner to reply and give proper explanation to the huge demand made by the respondent-Department. In such view of the matter this court sets aside the notice dated December 24 2009 and permits the petitioner to appear before the second respondent on February 15 2010 through its authorised representative in which event the second respondent shall give opportunity to the petitioner to peruse the entire records and take copies at his own cost relating to the petitioner s-company for the period from 1978-79 to 1997-98 and sufficient time shall be granted by the second respondent as par the requirement not exceeding four weeks from February 15 2010.

Summary

Issues:
Challenge to notice for arrears of tax, failure to provide necessary information, repeated requests for documents, intention to prolong matter, quantification of arrears based on C and F forms.

Analysis:

The petitioner challenged a notice for arrears of tax issued by the second respondent, claiming a huge amount dating back to 1978-79 to 1997-98. The company, previously closed as a sick industry, was revived in 2006. The petitioner requested necessary documents to ascertain the tax amount, but the respondent failed to provide them. The court previously directed the respondent to furnish required information, but the petitioner claimed non-compliance. Despite the respondent's claim of providing documents, the petitioner insisted on lack of access, leading to the issuance of subsequent notices demanding payment within seven days.

The court acknowledged the difficulty for the petitioner to respond to the tax demand without relevant documents. Consequently, the court set aside the notice and directed the petitioner to appear before the second respondent to access all records related to the company from 1978-79 to 1997-98. The petitioner was granted time to make claims based on C and F forms within a week, following which the respondent was instructed to quantify the amount due within two weeks, considering the petitioner's claims.

In conclusion, the court disposed of the writ petition without costs, allowing the petitioner to access necessary records, make claims based on specific forms, and have the arrears quantified accordingly.