2016 (6) TMI 1140 - HC - VAT and Sales Tax

Failure to show the sales and pay tax - the company having two PIN numbers with the same name - whether the company can have two PIN numbers with the same name? - Held that - It is not known as to how the petitioner could do so. The entire evasion of tax would not have been unearthed except for an inspection done in the place of business. In the written instructions given to the learned Government Pleader by the respondent, it is stated that the petitioner never paid tax and simply deducted TDS from the tax payable by him in the monthly return which is filed without any proof. The learned counsel for the petitioner has taken a contention that though the respondent had the details pertaining to office address of the petitioner as well as residential address of the Directors, they have sent the impugned notice to the work place, which was subsequently closed down. Therefore, the petitioner was forced to obtain a certified copy of the order and thereafter, approach this Court and file this Writ Petition. The fact as to whether notices were sent to proper address or address of the work site and whether the respondent was required to send notice to all the address etc. are all factual matters which have to be agitated by the petitioner before the Appellate Authority - petition allowed.

Summary

Issues:
1. Tax evasion by a construction company
2. Use of multiple PIN numbers by the company
3. Allegations of non-payment of taxes and improper notice delivery
4. Dismissal of the Writ Petition by the High Court

Analysis:
1. The judgment deals with a case involving a construction company accused of tax evasion by failing to declare sales and pay taxes. The company obtained separate PIN numbers for different work locations but with the same company name, raising questions about the legitimacy of such practices under the Tamil Nadu Value Added Tax laws. The court highlighted the evasion of tax, which was only discovered through a business inspection, emphasizing the seriousness of the offense.

2. The court noted the discrepancy in the company's actions, as it was not feasible for a company to have multiple PIN numbers under the same name. Despite the company's claim of surrendering the PIN numbers after completing work and canceling registration certificates, the court expressed skepticism about the company's compliance with tax regulations. The issue of tax deduction at source (TDS) without proper documentation further raised concerns about the company's tax payment practices.

3. Regarding the delivery of notices, the court addressed the petitioner's argument that notices were sent to a closed work site instead of the registered office or residential addresses of the directors. The court deemed these issues as factual matters to be contested before the Appellate Authority, indicating that the petitioner should pursue these claims through the appropriate legal channels rather than seeking relief through a Writ Petition.

4. Ultimately, the High Court dismissed the Writ Petition, ruling it as not maintainable in light of the circumstances presented. The decision was made without imposing any costs on the parties involved, concluding the case and also dismissing a related Miscellaneous Petition. The judgment underscores the importance of adhering to tax laws and proper legal procedures, signaling the need for businesses to comply with regulatory requirements to avoid legal consequences.