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2014 (3) TMI 1091 - HC - VAT and Sales TaxTenability of SCN - Section 25 (3) of the VAT Act, 2002 - return has not been filed for the period 1.4.13 to 31.10.13 under Section 9 (c) - Held that - when the dealer has disputed his liability to pay the tax and when returns are being filed, no order can be passed in the matter of demanding advance tax before the assessment - It is held that without assessment of the tax and computation process, issuing show-cause notice and recovery of tax by coercive method is unsustainable - SCN not valid - petition allowed - decided in favor of petitioner.
Issues:
Challenge to show-cause notice under Section 25(3) of VAT Act for non-filing of return. Analysis: The judgment in question pertains to a writ petition challenging a show-cause notice issued under Section 25(3) of the VAT Act, 2002, directing the petitioner to pay a specific amount within a limited timeframe due to non-filing of returns for a specified period. The court considered precedents such as Itarsi Oils and Flours Ltd., Fabworth (India) Ltd., Sanghi Brothers (Indore) Pvt. Ltd., and Kailash Raghuvanshi & another Vs. State of Madhya Pradesh, emphasizing the principle that recovery of advance tax should not occur before the completion of the assessment process. The court held that demanding tax prior to assessment is impermissible, and a notice of demand can only be issued post-assessment. Therefore, the court quashed the impugned action and directed the authorities to proceed with assessment and tax recovery in accordance with the established legal principles from the aforementioned cases. In conclusion, the court allowed the petition and disposed of the matter, instructing the respondents to adhere to the legal framework outlined in the cited cases for the assessment and recovery of tax. The judgment underscores the importance of following due process and completing the assessment before initiating coercive recovery measures, emphasizing the significance of upholding procedural fairness and legal standards in tax matters.
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