2011 (12) TMI 475 - HC - VAT and Sales Tax

Recovery proceedings - whether be declared as illegal, void and bad in law? - Held that - The petitioner has already approached to the settlement authority under section 24B and as per the procedure prescribed under section 24C, the authority has to decide the matter in accordance with law. Thus, the settlement authority shall expedite the matter and make an endeavour to decide/settle all the matters expeditiously as far as possible within a period of six months from the date of this order but not later than June 30, 2012. Till the matters are settled by the authority, no coercive action shall be taken against the petitioner in respect of dues for the assessment years 2003-04 to 2006-07 .

Issues:
1. Recovery proceedings initiated by the Commercial Tax Department for the period 2003-04, 2006-07.
2. Quashing of notices issued under section 146 of the M.P. Land Revenue Code, 1959.
3. Application for settlement of cases under section 24B of the M.P. Value Added Tax Act, 2002.
4. Protection against penal action post settlement under section 24(8) of the Act.

Analysis:

1. Recovery Proceedings Initiated by Commercial Tax Department:
The petitioner sought relief from recovery proceedings initiated by the Commercial Tax Department for the period 2003-04, 2006-07. The petitioner had applied for settlement of its case under section 24B of the M.P. Value Added Tax Act, 2002. The petitioner argued that the assessing officer should not proceed with recovery until the settlement proceedings are completed. The Government advocate informed the court that an undertaking was given not to cancel the petitioner's registration during the settlement application's pendency. The court noted the new procedure under sections 24B and 24C of the VAT Act, emphasizing the authority's need for time to decide disputes.

2. Quashing of Notices under M.P. Land Revenue Code:
The petitioner requested the quashing of notices issued under section 146 of the M.P. Land Revenue Code, 1959 for the mentioned periods. The court directed that no coercive action should be taken against the petitioner for dues related to those assessment years until settlement by the authority. However, any undisputed amounts were to be deposited within 30 days as per sections 24B and 24C. The settlement authority was instructed to expedite the process and provide a final order for compliance within the specified timeline.

3. Application for Settlement under Section 24B of the VAT Act:
The petitioner had applied for settlement under section 24B of the M.P. Value Added Tax Act, 2002 for the years 2003-04 to 2006-07. The court highlighted the provisions of sections 24B and 24C, outlining the procedure for settlement of cases. It was clarified that after settlement, no penal action could be initiated against the assessee under any administered Act by the Department. The court directed the settlement authority to decide and settle all matters within six months from the order date, ensuring compliance with the law.

4. Protection Against Penal Action Post Settlement:
Section 24(8) of the Act provided protection to the assessee post-settlement, stating that no penal action could be initiated against the applicant under any administered Act by the Department. This safeguarded the petitioner who had applied for settlement under section 24B. The court's directions emphasized the importance of timely settlement by the authority to prevent coercive actions against the petitioner and ensure compliance with the statutory provisions.

The judgment concluded with the issuance of directions to the settlement authority for expeditious resolution of the matter, a prohibition on coercive actions against the petitioner until settlement, and the requirement for timely compliance with the provisions of sections 24B and 24C.

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