2019 (7) TMI 1526 - HC - VAT and Sales Tax

Recovery proceedings - recovery on the basis of the AG Audit Para - HELD THAT - Issue Notice returnable on 24th July, 2019.

Summary

Issues involved: Challenge to recovery of tax amount based on AG Audit Para for financial year 2008/09 without assessment order and legality of recovery procedure.

Analysis:

Issue 1: Lack of Assessment Order and Recovery based on AG Audit Para
The petitioner, represented by Mr. Uchit Sheth, challenged the recovery of ?63,33,404/- plus interest as AG Audit Para for the financial year 2008/09 by the State Tax Officer without providing any assessment order. The petitioner contended that no proceedings were initiated for the said year resulting in an assessment order. It was argued that the recovery based on AG Audit Para, as indicated in the communications to the banks, was legally impermissible. The court, after considering the submissions, issued a notice returnable on 24th July, 2019. Additionally, as an interim measure, the court stayed the impugned communications dated 21.6.2019 addressed to the banks for recovery, emphasizing the need for proper legal procedures to be followed.

Issue 2: Legal Validity of Recovery Procedure
The legality of the recovery procedure initiated by the State Tax Officer was questioned by the petitioner. The petitioner raised concerns about the lack of transparency and procedural fairness in the recovery process, especially regarding the absence of an assessment order and the reliance on AG Audit Para for recovery. The court, in response to these concerns, granted a stay on the recovery process until the matter could be further examined, highlighting the importance of adherence to legal requirements and due process in matters of tax recovery. The court's decision to issue notice and provide interim relief reflects a commitment to ensuring that taxpayers' rights are protected and that tax recovery actions are carried out in accordance with the law.