2017 (8) TMI 1202 - HC - VAT and Sales Tax

Attachment of Bank Account - case of petitioner is that the first respondent cannot unilaterally pass an unreasonable and cryptic order stating that there is no excess entry tax available and attach the petitioner s bank account for the recovery of the entry tax - Held that - The petitioner filed a reply affidavit to the counter affiavit stating that the said allegations is false and there is excess entry tax available in their account. Not only reply affidavit has been filed, statement of accounts have been produced which prima facie shows that excess entry tax is available to the credit of the petitioner - In the light of the above factual position and the documents and accounts produced by the petitioner, it is prima facie clear that there is excess entry tax to the tune of ₹ 23,04,986/- available to the credit of the petitioner as of 01.04.2013. Therefore, the impugned proceedings are liable to be set aside - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to hand-written order for attachment of bank account and adjustment of entry tax arrears.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act 2006, contested a hand-written order by the first respondent dated 27.03.2017 and a subsequent bank account attachment letter dated 30.03.2017. The petitioner sought direction for adjusting arrears of entry tax for 2013-2014 from the excess entry tax paid during 2012-2013 and refunding the remaining amount as per Section 11 of the Entry Tax Act. The petitioner argued that the first respondent failed to acknowledge the provision allowing for adjustment of excess tax for any other period as per the petitioner's representation.

The petitioner disputed the first respondent's claim of adjusting excess entry tax and highlighted that the sum paid in advance was not utilized towards the output tax payable. The petitioner's representation was dismissed with a hand-written endorsement, and their bank account was attached, leading to the petitioner's grievance. The petitioner emphasized the need for adjustment of excess entry tax and subsequent refund, citing the unfair treatment by the first respondent.

Referring to the case of Commercial Tax Officer Vs. Coimbatore Auto Garage (P.) Ltd., the court recognized the right of the assessee to adjust excess entry tax while paying sales tax and to claim a refund under Section 11 of the Entry Tax Act. The court granted an interim order for maintaining a specific balance in the bank account, resulting in the lifting of the attachment.

During the proceedings, the first respondent admitted the availability of excess entry tax, indicating an error in the assessment process. The court, after reviewing the documents and accounts provided by the petitioner, concluded that there was indeed excess entry tax amounting to ?23,04,986 as of 01.04.2013. Consequently, the impugned orders were set aside, and the matter was remanded to the first respondent for reassessment, with a directive to consider the excess entry tax and conduct a fresh assessment within three weeks from the date of the order.