2016 (7) TMI 1428 - HC - VAT and Sales Tax

Service of notice - Section 27(4)(ii) of the Tamil Nadu Value Added Tax Act, 2006. Held that - In the case on hand, admittedly, the notice dated 25.05.2015 was served on Manikandan, who is none else than an employee of the petitioner-Company. Therefore, the petitioner cannot take a superficial claim that the Notice was served only on their employee and not on the petitioner-Company - the Notice can be served upon the authorised representative. Petition dismissed.

Summary

Issues Involved:
Challenge to notice served on an employee instead of the company directly under Section 27(4)(ii) of the Tamil Nadu Value Added Tax Act, 2006.

Detailed Analysis:

Issue 1: Service of Notice
The petitioner, a company, challenged the notice served on an employee instead of directly on the company under Section 27(4)(ii) of the Act. The petitioner argued that the employee did not communicate the notice, leading to the company's inability to respond, resulting in the rejection of its claim and imposition of a penalty. The petitioner contended that the notice was not served in a reasonable manner, depriving them of the opportunity to substantiate their claim, citing a previous court order for similar circumstances.

Analysis: The court considered the provisions of Rule 19 of the Act, which allows service of notices on the authorized representative of a dealer. The court noted that serving the notice on an employee of the company was valid as per the rule. The court rejected the petitioner's argument that notice should have been served directly on the company and emphasized the responsibility of a private limited company to ensure proper communication within the organization. Consequently, the court dismissed the writ petitions challenging the service of notice on the employee.

Issue 2: Appeal and Payment of Tax
The petitioner requested the court to allow them to file appeals against the decision, claiming a strong case on merits. The court, acknowledging the electricity shortage issue faced by the state, directed the petitioner to pay 50% of the disputed tax within two weeks to file appeals. The court specified the timeline for filing appeals and instructed the competent authority to dispose of the appeals within four weeks from receipt.

Analysis: The court granted the petitioner the opportunity to file appeals by paying the specified amount within the given timeframe. It clarified that the decision did not delve into the merits of the case, leaving it to the competent authority to decide based on the law. The court warned that failure to pay the conditional amount within the stipulated time would allow the respondents to take action as per the original notice. Additionally, the court excluded the issue of limitation in the appeals process and declared that the judgment should not set a precedent for future cases.

In conclusion, the court dismissed the writ petitions challenging the service of notice on the employee of the company, provided an opportunity for the petitioner to file appeals by paying 50% of the disputed tax, and set timelines for appeal filing and disposal, ensuring fairness and adherence to legal procedures.