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2012 (6) TMI 767 - HC - VAT and Sales TaxOrder of the assessment creating demand - Recovery proceedings - Held that - As clearly mentioned in para 27 of the counteraffidavit that the impugned letter which was dispatched to the dealer from the Deputy Commissioner Commercial Taxes (SIB) on June 16 2011 was only for information. The letter was not an assessment order. And specifically it is again mentioned in para 29 of the counter-affidavit that it is up to the will and discretion of the dealer either to deposit lawfully the tax and interest suggested in the light of facts mentioned in the letter or to deposit the tax after the assessing officer passes the assessment order and issues the demand letter. In the last para 31 it is further mentioned in the counter-affidavit that the assessing officer has to conduct proceedings only after giving a reasonable opportunity of hearing to the petitioner. Therefore the impugned letter dated June 16 2011 sent by the SIB Unit is not binding on the dealer or the concerned assessing officer. Thus the direction given to the petitioner to deposit the amount is set aside and no recovery shall be made in pursuance of the impugned order. However it is made clear that the assessing officer may make assessment in accordance with law.
Issues:
- Jurisdiction of Deputy Commissioner, Commercial Taxes (SIB) to pass assessment order - Validity of the order dated June 16, 2011 - Relief sought by the petitioner Jurisdiction of Deputy Commissioner, Commercial Taxes (SIB) to pass assessment order: The petitioner, a private limited company, challenged an order dated June 16, 2011, passed by the Deputy Commissioner, Commercial Taxes (SIB), directing the petitioner to deposit a substantial amount for assessment years 2005-06 to 2010-11. The petitioner contended that the Deputy Commissioner lacked jurisdiction to pass such an order as he was not the assessing authority. The State, in its counter-affidavit, admitted that the Deputy Commissioner was not the assessing authority and clarified that the letter sent to the petitioner was for information only, not an assessment order. The State emphasized that the assessing officer must conduct proceedings after providing a reasonable opportunity of hearing to the petitioner. Consequently, the court held that the impugned letter was not legally binding on the dealer or the assessing officer, and the direction to deposit the amount was set aside. Validity of the order dated June 16, 2011: The petitioner argued that the order dated June 16, 2011, based solely on a survey conducted earlier, was invalid as the Deputy Commissioner did not have the authority to create a tax demand. The State's counter-affidavit reiterated that the letter sent to the petitioner was not an assessment order and that the assessing officer must follow due process before issuing a demand letter. The court, without delving into the merits of the case, ruled in favor of the petitioner, setting aside the direction to deposit the amount and prohibiting any recovery based on the impugned order. The court clarified that the assessing officer could proceed with assessment in accordance with the law. Relief sought by the petitioner: The petitioner sought various writs, orders, or directions, including quashing the order dated June 16, 2011, and restraining the respondents from taking further proceedings based on that order. The court allowed the writ petition, emphasizing that the impugned letter was not binding and directing that no recovery should be made following the order dated June 16, 2011. The court granted relief to the petitioner while maintaining that the assessing officer could proceed with assessment within the bounds of the law. In conclusion, the High Court of Uttarakhand ruled in favor of the petitioner, highlighting the lack of jurisdiction of the Deputy Commissioner to pass the assessment order and the invalidity of the order dated June 16, 2011. The court provided relief by setting aside the direction to deposit the amount and prohibiting any recovery under the impugned order, allowing the assessing officer to conduct assessment proceedings lawfully.
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