2018 (2) TMI 1382 - HC - VAT and Sales Tax

Penalty - attachment of bank accounts - the petitioner has sought for a direction upon the second respondent to authorize and empower the third respondent to take on file the Revision Petition - Held that - this issue need not be gone into, in the present case, since the petitioner has paid the entire tax amount and therefore, the attachment of the petitioner s bank account should be immediately lifted and the petitioner should be permitted to pursue his revisional remedy, challenging the levy of penalty. Since the petitioner has paid the entire tax amount, rather what has been assessed by the fifth respondent, the fifth respondent shall forthwith lift the attachment of the petitioner s bank account, and issue necessary instructions to the petitioner s bankers - The second respondent is directed to empower the third respondent to take on file the petitioner s Revision Petition, dated 02.08.2017, which was initially filed in the Office of the third respondent, dated 03.08.2007, and such order, empowering the third respondent to deal with the Revision Petition. Petition allowed.

Summary

Issues:
1. Challenge to levy of penalty under the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981.
2. Authority to attach bank account under the Tamil Nadu Value Added Tax Act, 2006.

Issue 1: Challenge to levy of penalty under the Tamil Nadu Tax on Luxuries in Hotels and Lodging Houses Act, 1981:
The petitioner did not dispute the tax demand but sought direction to challenge the penalty imposed. The petitioner alleged delayed acceptance of returns and tax remittance, leading to penalty demands. The petitioner paid the entire tax amount but disputed the penalty. The Revision Petition filed by the petitioner was returned by the third respondent, citing lack of authority to entertain it. The petitioner sought direction for the third respondent to consider the Revision Petition.

Issue 2: Authority to attach bank account under the Tamil Nadu Value Added Tax Act, 2006:
The petitioner argued that the fifth respondent lacked the authority to attach the bank account under the Tamil Nadu Taxes on Luxuries in Hotels and Lodging Houses Act, 1981. The respondent invoked Section 45 of the Tamil Nadu Value Added Tax Act, 2006 for the attachment. The petitioner contended that the attachment was without jurisdiction.

The judgment emphasized that since the petitioner had paid the entire tax amount assessed, the attachment of the bank account should be lifted immediately. The court directed the fifth respondent to lift the attachment and instructed the second respondent to authorize the third respondent to consider the Revision Petition. The court ordered that no coercive action should be taken against the petitioner until a decision was made on the Revision Petition. Monthly returns filed by the petitioner were to be accepted, and the matter was to be decided on its merits without any costs imposed.