2016 (10) TMI 854 - HC - VAT and Sales Tax

Attachment of Bank Accounts - recovery of arrears of sales tax under the Central Sales Tax Act, 1956 - straight away garnishee order passed without serving any notice or passing any assessment order - Held that - Considering the nature of allegation based on which, assessment has been completed and as it pertains only to production of C forms, this Court is inclined to grant one more opportunity to the petitioner to produce all the documents. Accordingly, there will be a direction to the petitioner to appear before the respondent within a period of one week from the date of receipt of a copy of this order and produce all original C forms and on production of the same, the respondent shall verify and if found to be in order, revise the assessment in accordance with law. If there are any other issues, the same should also be put to the petitioner and they should be able to file their objections as well - attachment order lifted. The Commissioner directed that the Assessing Officers can allow Form-C, Form E-I, E-II and F-Forms, to be filed after completion of assessment on sufficient cause.

Issues:
1. Notice of attachment of bank account for alleged arrears of sales tax under the Central Sales Tax Act, 1956.
2. Validity of the notice served on the petitioner.
3. Allegation of non-receipt of notice and assessment order by the petitioner.
4. Signature verification on the notice and assessment order.
5. Assessment completion based on non-production of 'C' forms.
6. Legality of straightaway bank account attachment without following proper procedure.
7. Granting an opportunity to the petitioner to produce necessary documents.
8. Reference to relevant legal judgments and circulars for Assessing Officer's guidance.
9. Acceptance of 'C' forms after assessment completion.

Analysis:
1. The judgment dealt with a notice of attachment of the petitioner's bank account for alleged sales tax arrears under the Central Sales Tax Act, 1956. The petitioner contended that no notice was served, and the assessment order was passed without following due process, leading to the garnishee order.

2. The petitioner raised concerns about the validity of the notice served on them and questioned the authenticity of the signatures on the notice and assessment order, claiming they were not those of the Managing Director. This raised doubts about the bonafides of the Department's statement regarding notice service.

3. The assessment for the year 2013-2014 was completed based on the non-production of 'C' forms by the petitioner. The petitioner argued that had they received a notice, they would have provided all relevant records, emphasizing that the bank account attachment was done abruptly without adherence to proper procedures.

4. The court acknowledged the nature of the allegation related to the non-production of 'C' forms and granted the petitioner an opportunity to produce the required documents within a week. Upon verification, if found in order, the assessment would be revised as per the law, and the petitioner was directed to cooperate in the proceedings.

5. The judgment referenced legal precedents and circulars to guide the Assessing Officer in handling cases where declarations in Form-'E' and Form-'F' are submitted post-assessment completion. It highlighted the acceptance of certain forms after assessment completion based on sufficient cause, as per the circulars issued by the Commissioner of Commercial Taxes.

6. The issue of whether 'C' forms can be accepted after assessment completion was addressed, with the petitioner's argument revolving around the completion status of the assessment. The judgment concluded by disposing of the Writ Petition and closing connected miscellaneous petitions, emphasizing compliance with legal guidelines and fair assessment practices.

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