2015 (11) TMI 1600 - HC - VAT and Sales Tax

Jurisdiction of enforcement wing authorities to assess the petitioner and collect the tax from the petitioner during the course of inspection - Held that - This Court time and again held that there is no power vested with the enforcement wing authorities to compel the petitioner to handover the cheques and despite the same, they are collecting cheques - reliance placed on the decision of the case of M/s.Astek Electricals and Controls Vs. The Assistant Commissioner (CT), The Commercial Tax Officer Enforcement and The Branch Manager, Canara Bank 2013 (5) TMI 757 - MADRAS HIGH COURT - the respondents directed to return the cheques bearing Nos. 001074, 001075 and 001076 respectively to the petitioner forthwith - petition allowed.

Summary

Issues:
Petitioner seeking return of cheques collected during inspection, Jurisdiction of authorities to assess and collect tax during inspection.

Analysis:
The petitioner, a manufacturer and dealer in garments, filed a writ petition seeking the return of cheques collected by respondents 1 and 2 during a surprise inspection on the grounds that the authorities lacked jurisdiction to assess and collect tax during the inspection. The total tax demand arrived at was Rs. 36,92,584. The petitioner contended that the authorities had overstepped their jurisdiction, prompting the petition before the court.

During the hearing, the petitioner's counsel relied on a previous decision of the court in M/s.Astek Electricals and Controls Vs. The Assistant Commissioner, highlighting that enforcement authorities do not have the power to compel the petitioner to hand over cheques. The court reiterated that the enforcement wing authorities were not authorized to collect cheques, as established in the referred case. The court acknowledged the petitioner's argument and ruled in favor of the petitioner based on the precedent set by the earlier judgment.

In line with the precedent set in M/s.Astek Electricals and Controls case, the court allowed the writ petition and directed respondents 1 and 2 to return the cheques bearing specific numbers to the petitioner immediately. The court emphasized that the assessing authority could still take appropriate actions within the bounds of the law. No costs were awarded, and the connected miscellaneous petition was closed as a result of the judgment.