2016 (9) TMI 609 - HC - VAT and Sales Tax

Serving of notice - Held that - apart from the signature acknowledging the receipt of the notices and orders, round seal of the Company has been affixed. Therefore, when the seal of the Company is affixed and the concerned officer has signed, it is presumed that the notices were received by the petitioner. Assessment order - imposition of penalty - TNVAT Act, 2006 - CST Act, 1956 - Held that - there are several issues involved in the assessment process and the assessment has been completed on the ground that the petitioner has not been able to satisfy their case. The Court is inclined to grant liberty to the petitioner to go before the Assessing Officer, but, subject to certain conditions - the petitioner is permitted to pay 15% of the disputed tax - If the petitioner effects payment, then they are entitled to treat the impugned orders as show cause notices and submit their objections, along with the documents and on receipt of the objections, the respondent shall afford an opportunity to the petitioner and redo the assessment in accordance with law. If the petitioner fails to comply with the above condition within the time stipulated, the benefit of this order will not enure to the petitioner and the Writ Petitions will stand dismissed, leaving it open to the respondent to levy 20%, as ordered in the impugned order. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to assessment and penalty proceedings under TNVAT Act, 2006 and CST Act, 1956 based on lack of notice received by the petitioner before the orders were passed.

Analysis:
The petitioner, a registered dealer under TNVAT Act and CST Act, challenged assessment and penalty proceedings due to alleged lack of notice before the orders were passed. The petitioner claimed they only became aware of the assessment orders and penalty levies through a communication dated 27.4.2016. However, the Court found that show cause notices had been received by the petitioner on 03.07.2015 itself, with the company's round seal affixed, indicating receipt. The petitioner's argument that notices might have been served on an employee who had left abruptly was rejected, as the seal and officer's signature implied proper receipt.

Analysis:
The petitioner contended they had a strong case on merits and sought an opportunity to present their case before the Assessing Authority. While the petitioner mentioned withdrawals from their bank account due to attachment orders, they lacked specific information on the recovered amounts. Given the complexities in the assessment process and the petitioner's inability to satisfy their case during the assessment, the Court granted the petitioner liberty to appear before the Assessing Officer under certain conditions.

Analysis:
The Court permitted the petitioner to pay 15% of the disputed tax amounting to ?2,23,66,264 under both TNVAT Act and CST Act, over and above any amounts already recovered from their bank account. The petitioner was given eight weeks to make this payment. If the payment was made, the impugned orders would be treated as show cause notices, allowing the petitioner to submit objections and relevant documents for a reassessment by the respondent. Failure to comply within the stipulated time would result in the dismissal of the Writ Petitions, enabling the respondent to levy 20% as per the original order.

Analysis:
Ultimately, the Writ Petitions were dismissed with the specified conditions, and no costs were awarded. The connected Miscellaneous Petitions were closed accordingly, bringing the legal proceedings to a conclusion.