2019 (1) TMI 1880 - HC - VAT and Sales Tax

Service of assessment order - validity of consequential recovery action - HELD THAT - The assessment order was actually served on the petitioner. The petitioner s counsel is not in a position to say as to whether the said order was questioned in the manner known to law. The affidavit filed in support of the Writ petition is also silent. The petitioner has woken up only after the recovery action was taken. What is under challenge in this order is only the auction notice dated 27.07.2011. When the primary order has not been set aside or stayed in the manner known to law the challenge to the consequential recovery action is not maintainable. Therefore as long as the original order dated 30.09.2003 has not been challenged there cannot be any challenge to the consequential recovery action. Of course the petitioner will be liable only to the extent of inheritance. There cannot be any personal liability for the legal representatives. The property of the original assessee alone can be proceeded against. Petition dismissed.

Summary

Issues: Challenge to assessment orders and recovery action

Assessment Orders:
The judgment pertains to a challenge against assessment orders for the years 1997-98 and 1998-99 issued to the petitioner's deceased husband, who was the proprietor of a registered dealer. Notices were served to the petitioner's daughter and son-in-law, followed by the assessment orders being served to the petitioner herself. The petitioner contested the enforcement of these orders in a writ petition.

Analysis:
The court examined the service of the assessment order and found it was properly served on the petitioner. The court noted that the petitioner had not challenged the original assessment order dated 30.09.2003 in the appropriate legal manner. As a result, the court held that any challenge to the subsequent recovery action, specifically the auction notice dated 27.07.2011, was not maintainable. The court emphasized that without setting aside or staying the original assessment order, challenging the recovery action was not permissible. The court clarified that the petitioner's liability was limited to the extent of inheritance, and there could be no personal liability for legal representatives. Only the assets of the original assessee could be subject to recovery proceedings.

Recovery Action:
The court dismissed the writ petition challenging the recovery action, emphasizing that without challenging the original assessment order, contesting the recovery action was not tenable. The court ruled that the auction notice was not challengeable without addressing the primary order first. The judgment highlighted that personal liability does not extend to legal representatives, and only the assets of the deceased assessee could be pursued for recovery.

Conclusion:
The court dismissed the writ petition challenging the recovery action, emphasizing the importance of challenging the original assessment order before contesting subsequent recovery proceedings. The judgment clarified the limited liability of legal representatives and the scope of recovery actions against the assets of the deceased assessee. The court's decision underscored the necessity of following legal procedures in challenging tax assessments and recovery actions.