2022 (4) TMI 987 - HC - VAT and Sales Tax

Condonation of delay in filing petition - requirement of pre-deposit conditions - validity of assessment orders - attachment of bank accounts - HELD THAT - As rightly pointed out by the learned counsel for the petitioner, if appeal is filed, the pre-deposit condition would be imposed only in respect of the due payable by the petitioner against the tax demand and not penalty or interest. Therefore, this Court feels that, if the petitioner comes forward to pay 50% of the tax demand, i.e., 50% of ₹ 1,70,25,921/-, approximately ₹ 85,00,000/- within a time frame on condition that, one out of the three Banks viz., ICICI Bank, Shevapet Branch, Salem, State Bank of India, Tolstoy Marg, New Delhi and Axis Bank, Worli Branch, Mumbai, if attachment made in Axis Bank, Worli Branch, Mumbai can be lifted for the period of two weeks enabling the petitioner to pay this ₹ 85,00,000/-, that could be a workable arrangement, based on which, the petitioner can approach the Appellate Authority challenging all these impugned assessment orders by filing regular appeal, where, the pre-deposit conditions can be waived in view of the payment of the 50% of the amount now is directed to be paid by virtue of this order of the Court. The respondents are hereby directed to lift the attachment made against the petitioner's account lying at Axis Bank, Worli Branch, Mumbai forthwith. On such lifting of attachment, the petitioner shall deposit a sum of ₹ 85,00,000/- being 50% of the tax demand for the assessment years referred to above, to the extent of ₹ 1,70,25,921/-, within a period of one week Petition disposed off.

Summary

Issues:
Challenge to assessment orders without approaching Appellate Authority, Delay in filing writ petitions, Pre-deposit condition for filing appeal, Arrangement for payment of 50% of tax demand, Bank account attachment, Directions for lifting attachment and filing appeals.

Analysis:
The High Court of Madras heard writ petitions concerning CST assessment against the petitioner for multiple assessment years. The assessment orders were served in February 2020 but were belatedly challenged in 2022 due to an order of attachment on the petitioner's bank accounts. The court noted the delay and lack of plausible reasons for not approaching the Appellate Authority earlier, considering rejecting the petitions on the ground of latches. However, the petitioner's counsel argued for the possibility of filing appeals before the Appellate Authority due to an extension granted by the Supreme Court due to the Covid-19 situation.

The petitioner proposed an arrangement to pay 50% of the tax demand to be able to file appeals. The total amount due, including penalty and interest, was ?4,01,95,166. The court considered the submissions from both sides and directed the lifting of attachment on one bank account for the petitioner to pay ?85,00,000, which was 50% of the tax demand. Upon payment, no further action would be taken by the Revenue based on the assessment orders. The petitioner was allowed to approach the Appellate Authority within two weeks to file regular appeals without any pre-deposit condition.

If the payment condition was not met within a week, the Revenue could reattach the bank account and proceed with recovery. The attachment on other bank accounts would continue until the appeal's disposal. The court emphasized prompt compliance for considering lifting attachments on other bank accounts. The writ petitions were disposed of with liberty granted to the petitioner to approach the Appellate Authority.