2019 (9) TMI 106 - HC - VAT and Sales Tax

Validity of assessment orders in relation to tax and penalty payable - Telangana VAT Act - tax periods 2014-15 to 2017-18 - arithmetical errors in the orders under challenge - HELD THAT - We are of the opinion that the first respondent should undertake the exercise afresh. It is not open to the first respondent to pass orders in such a careless manner when the same have adverse civil consequences for the assessee, viz., the petitioner firm - the impugned order of assessment dated 29.04.2019 and the consequential penalty order dated 22.05.2019 are accordingly set aside. Petition allowed.

Summary

Issues:
Challenge to assessment order and penalty order under the Telangana Value Added Tax Act, 2005 due to arithmetical errors.

Analysis:
The petitioner firm, M/s. Symmbol Digitals, Hyderabad, challenged the assessment order and penalty order related to tax and penalty payable under the Telangana Value Added Tax Act, 2005 for the tax periods 2014-15 to 2017-18. The assessment order dated 29.04.2019 and penalty order dated 22.05.2019 were passed by the Commercial Tax Officer-III, Enforcement Wing, Office of the Commissioner of Commercial Taxes, Hyderabad. The petitioner sought relief through two writ petitions, W.P.No.13672 of 2019 and W.P.No.16147 of 2019.

Upon hearing the arguments presented by Ms. J. Sunitha, counsel for the petitioner firm, the Court observed arithmetical errors in the orders under challenge. Consequently, the Court granted interim stay of further proceedings subject to the petitioner firm depositing 25% of the tax and penalty amounts within a specified timeframe. Mr. M. Govind Reddy, special standing counsel for Commercial Taxes, State of Telangana, representing the respondents, acknowledged the existence of arithmetical errors in the orders being contested.

In light of the identified errors, the Court opined that the first respondent should conduct a fresh assessment. The Court emphasized that passing orders with adverse civil consequences for the assessee in a careless manner is unacceptable. Consequently, the impugned assessment order dated 29.04.2019 and penalty order dated 22.05.2019 were set aside. The first respondent was directed to undertake a fresh assessment based on the notice of assessment of value added tax dated 10.04.2019, ensuring the petitioner firm receives a fair opportunity to be heard. The amounts deposited by the petitioner firm as per the interim orders were to be adjusted according to the fresh assessment conducted by the first respondent.

As a result of the Court's findings, the writ petitions were allowed, and any pending miscellaneous petitions were closed in accordance with the final order. No costs were awarded in this matter.