2021 (2) TMI 616 - HC - VAT and Sales Tax

Validity of assessment order - Revenue submits that since an assessment order has been passed with regard to the petitioner and the appeal was dismissed, the respondents were well within their right to initiate steps for recovery of dues as well as for prosecution - HELD THAT - The appeals should be heard and decided on merit. Matter is remanded back to respondent No.5 for taking up the appeal of the petitioner for hearing and to decide the same in accordance with law. Representative of the petitioner shall appear before respondent No.5 on 01.02.2021 at 11 00 a.m. whereafter respondent No.5 shall proceed with the hearing of the appeal and decide the same in accordance with law within a period of three months therefrom - Petition allowed by way of remand.

Summary

Issues:
Challenge to order rejecting appeal, Assessment order under Central Sales Tax Act, Delay in passing impugned order, Presence of petitioner's representative during appeal, Interest in legal remedy, Initiation of recovery and prosecution proceedings, Right to initiate steps for recovery and prosecution, Appeal to be heard on merit, Setting aside the order, Remanding the matter for hearing, Stay on recovery and prosecution proceedings, Keeping all contentions open.

Analysis:
The primary issue in this case is the challenge made to the order rejecting the appeal by the Deputy Commissioner of State Tax. The assessment order under the Central Sales Tax Act assessed a substantial amount payable by the petitioner, including interest and penalties under the Maharashtra Value Added Tax Act. The petitioner appealed this order, but the impugned order rejecting the appeal was passed after a significant delay of almost seven years.

During the proceedings, the petitioner's representative claimed to have been present on a specific date, contrary to what was recorded in the impugned order. The petitioner expressed a keen interest in contesting the tax demand before the appellate forum, as the dismissal of the appeal had led to the initiation of recovery and prosecution proceedings by the respondents.

The Attorney General argued that the respondents were justified in initiating steps for recovery and prosecution after the dismissal of the appeal. However, after hearing both parties and reviewing the case, the court decided that the appeals should be heard and decided on merit. Consequently, the order rejecting the appeal was set aside, and the matter was remanded back to the Deputy Commissioner for a fresh hearing.

The court directed the petitioner's representative to appear for the hearing, and the Deputy Commissioner was instructed to decide the appeal within three months. Until the appeal was disposed of, the respondents were prohibited from proceeding with recovery and prosecution related to the assessment order. The court kept all contentions open, and the writ petition was disposed of accordingly.