2021 (2) TMI 1098 - HC - VAT / Sales Tax

Validity of attachment order passed before the expiry of period of filing of an appeal - service of notice - HELD THAT - submission of the revenue to the effect that the entire tax becomes payable immediately upon dismissed of an appeal by the first appellate authority thus, appears to be misconceived - An assessee aggrieved by an appellate order should have the full benefit of the period granted for filing of appeal and it is only thereafter that proceedings may be initiated recovery of the disputed demand. There is support in this regard from a decision of a learned Single Judge of this Court in COIMBATORE PIONEER MILLS LIMITED VERSUS COMMERCIAL TAX OFFICER, PEELAMEDU NORTH ASSESSMENT CIRCLE, COIMBATORE AND ANOTHER 2007 (3) TMI 696 - MADRAS HIGH COURT wherein a direction has been issued to the Department not to initiate steps for recovery till such time the time for filing of second appeal has expired. A direction is issued to the 2nd respondent to lift the impugned attachment forthwith - Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to attachment notice for coercive recovery of disputed tax under Puducherry Value Added Tax Act, 2007.

Analysis:
The writ petition challenges an attachment notice issued to the Bank Manager, HDFC Bank Limited, Chennai, for coercive recovery of a disputed tax amount under the Puducherry Value Added Tax Act, 2007. The petitioner argues that the recovery is premature as the common appellate order was served late, and the period for filing a second appeal before the Sales Tax Appellate Tribunal had not expired. The respondent, however, contends that the entire demand becomes payable immediately upon service of the order, citing Section 49 of the Act.

The provisions of Section 49 of the Act grant a period of 60 days, extendable with condonation, for filing a second appeal challenging the order of the first appellate authority. An appeal must be accompanied by 25% of the disputed tax, which can be waived partly or fully by the appellate tribunal upon application, subject to furnishing appropriate security. The respondent's argument that the tax becomes immediately payable upon dismissal of an appeal by the first appellate authority is deemed misconceived by the court.

Referring to a previous judgment in Coimbatore Pioneer Mills Ltd. Vs. CTO, the court supports the view that an assessee should have the full benefit of the appeal filing period before recovery proceedings can be initiated. The court directs the respondent to lift the attachment immediately, thereby allowing the writ petition and closing connected miscellaneous petitions without costs.