2021 (10) TMI 932 - HC - VAT and Sales Tax

Validity of Tax Recovery Notice (TRN) - demand for Petrol and Diesel suppression and cloth material suppression - levy of penalty u/s 43(2) of the OVAT Act - HELD THAT - The fact of the matter is that the assessment order has remained unchallenged by the Petitioner, even assuming that it was without jurisdiction. Having not availed the remedy of an appeal, the Petitioner cannot question the assessment order at this stage i.e. after receiving the TRN. Consequently, the Court is not prepared to entertain at this stage a challenge to the assessment order or to the consequent TRN. Petition dismissed.

Summary

Issues: Challenge to Tax Recovery Notice (TRN) based on jurisdiction of assessment order.

In this case, the petitioner challenged a Tax Recovery Notice (TRN) issued by the Tax Recovery Officer, CT & GST, Assessment Unit, Gunupur, based on an assessment order passed against the petitioner for alleged suppression of sales and imposition of penalty. The petitioner argued that the TRN was served late and the assessment order was without jurisdiction. However, it was revealed that the assessment order was served on the petitioner in 2017, and the petitioner did not challenge it or pay the demanded amount. The court noted that since the petitioner did not avail the remedy of an appeal against the assessment order, they cannot question it at the stage of receiving the TRN. Therefore, the court dismissed the writ petition, stating that the challenge to the assessment order or TRN cannot be entertained at this stage.

This judgment highlights the importance of timely challenging assessment orders and the consequences of not availing the remedy of appeal. It underscores that failure to challenge an assessment order within the prescribed time limits can prevent a taxpayer from later questioning the validity of the order during enforcement proceedings. The court emphasized that the statutory remedies available to taxpayers must be utilized effectively to address any grievances regarding tax assessments. Additionally, the judgment reiterates the principle that procedural requirements, such as timelines for filing appeals, play a crucial role in determining the validity of challenges raised by taxpayers against tax recovery actions.