2020 (12) TMI 907 - HC - VAT and Sales Tax

Attachment of Bank Accounts - recovery of tax arrears - TNVAT Act - it is contended that inasmuch as the impugned order for recovery had been issued for the amount under an assessment order which has been set aside, such demand cannot survive and would have to be nullified - HELD THAT - There is substantial force in the submissions made by the Learned Counsel for the Petitioner, which deserves acceptance and the impugned orders of recovery of the amounts demanded for the assessment made for the year 2013-2014 under the TNVAT Act, is set aside. Though obvious, it is made clear that the First Respondent is not precluded from recovering any amount due from the Petitioner in respect of fresh order of assessment passed by the First Respondent in Order No. TIN 33830947422/ 2013-14 dated 21.09.2015, if not already paid, by appropriate legal proceedings in the manner recognized by law. Petition disposed off.

Summary

Issues:
Challenge to recovery order for tax arrears assessed for the year 2014-2015 based on an erroneous order for the year 2013-2014.

Analysis:
The Writ Petition contested the recovery order issued by the First Respondent for tax arrears assessed in 2014-2015, based on an erroneous order for 2013-2014. The First Respondent clarified the error, stating that there were no pending arrears for 2014-2015. The Petitioner's Counsel highlighted that the recovery orders were based on an assessment order for 2013-2014, which had been challenged previously. The Division Bench had set aside the assessment order, directing a fresh consideration based on a circular by the Commissioner. The Court found merit in the Petitioner's submissions and set aside the recovery orders for 2013-2014. The First Respondent was allowed to recover any amount due based on a fresh assessment order for 2013-2014.

The Petitioner's Counsel argued that the recovery orders were invalid as they were based on an assessment order that had been set aside. The Court agreed with this contention, setting aside the recovery orders for the tax arrears assessed in 2013-2014. The Court clarified that the First Respondent could pursue recovery based on a fresh assessment order for 2013-2014. The judgment emphasized that the recovery orders for the earlier assessment were nullified due to the setting aside of the assessment order, ensuring that the Petitioner was not unfairly burdened with erroneous demands.

The Court's decision was based on the Petitioner's challenge to the recovery orders for tax arrears assessed in 2013-2014, which were linked to an erroneous assessment order. The Court accepted the Petitioner's argument that the recovery orders should be set aside since the assessment order had been previously overturned by the Division Bench. The judgment clarified that the First Respondent could pursue recovery based on a fresh assessment order for 2013-2014, ensuring that the Petitioner was not unfairly subjected to demands arising from an erroneous assessment order.