2014 (6) TMI 876 - HC - VAT and Sales Tax

Attachment of property - Arrears of tax - Opportunity not provided - violation of principles of natural justice - Held that - Admittedly, the respondent levied tax in the year 2012. Against which, the petitioner has not preferred any appeal. Therefore, distraint orders have been passed by the respondent attaching the property of the petitioner. However, it is not fair on the part of the respondent to attach the properties of the petitioner as it will affect the very business. If the attachment is in force, it is not possible for the petitioner to run the industry. - respondent is directed to raise the attachment on condition that the petitioner pays 10% of the tax amount in respect of each of the assessment years within a period of two weeks from the date of receipt of a copy of this order. Since the petitioner has filed an application under Section 84 of the TNVAT Act read with Section 9(2) of the CST Act, 1956, the respondent is also directed to consider the same and pass orders on merits and in accordance with law, within a period of two months thereafter. - Decided conditionally in favour of assessee.

Summary

Issues:
1. Violation of principles of natural justice in passing an order of attachment without affording an opportunity to the petitioner.
2. Disallowance of exemption claim and levy of higher tax by the respondent.
3. Failure of the petitioner to pay the tax amount or prefer an appeal against the tax levied in 2012.
4. Directive sought for the respondent to dispose of the petitions filed by the petitioner under Section 84 of the TNVAT Act, 2006, read with Section 9(2) of the CST Act, 1956.

Analysis:
The petitioner filed writ petitions seeking a mandamus to direct the respondent to expeditiously dispose of the petitions filed under Section 84 of the TNVAT Act, 2006, along with Section 9(2) of the CST Act, 1956, for revising or rectifying the assessment in CST for the years 2007-08, 2008-09, and 2009-2010. The petitioner contended that the respondent had attached the property without providing an opportunity, breaching principles of natural justice. The respondent had disallowed an exemption claim and imposed higher tax, leading to the petitioner's grievances.

During the hearing, it was highlighted that the petitioner had not taken any steps to pay the tax amount or appeal against the levy imposed in 2012. Consequently, distraint orders were issued to attach the petitioner's property. However, considering the impact on the petitioner's business due to the attachment, the court found it unfair and directed the respondent to lift the attachment conditionally. The condition required the petitioner to pay 10% of the tax amount for each assessment year within two weeks. Moreover, the respondent was instructed to review the petition filed by the petitioner under the relevant Acts and pass orders within two months.

In conclusion, the court disposed of the writ petitions with the mentioned directives and observations, emphasizing the need for a fair assessment process and adherence to legal procedures. No costs were awarded, and connected miscellaneous petitions were closed as a result of the judgment.