2022 (5) TMI 293 - HC - VAT and Sales Tax

Attachment Order - whether on 02.08.2018 as claimed by the petitioner, the reply had been given treating the earlier orders as a show cause notice as directed as a condition by the learned Judge in the earlier round of litigation or not? - HELD THAT - Even though vehemently contended by the learned counsel appearing for the petitioner that, on 02.08.2018 reply had been given, it appears that the said reply whether had been given or not cannot be concluded now as there is no proof to that effect. In view of the stand taken by the Revenue that, no such reply had been given, this Court has to consider that no such reply had been filed by the petitioner in time - If the second condition is not complied with, then as per the orders of this Court in the earlier order referred to above dated 19.06.2018, the Revenue is not precluded from proceeding to recover the money. Therefore, the present order of attachment, which is impugned herein has been passed - this Court feels that, there can be no procedural irregularity on the part of the Revenue in passing the impugned order. Tax demand or due with penalty - HELD THAT - It comes about Rs.51,32,799/-, out of which, according to the petitioner counsel, a sum of Rs.8,99,352/- is on a different foot, where entry tax demand has been made, that assessment order also has been set aside by this Court in the earlier round of litigation, pursuant to which, no further proceedings have been issued, therefore, that demand cannot be now made without passing any order as per the direction of this Court made earlier - If the said amount of Rs.8,99,352/- is deducted from the total demand, now made it comes out about Rs.42,00,000/- and odd. This Court feels that out of this Rs.42 lakhs due i.e., tax demand penalty, if the petitioner comes forward to pay 50% of the amount, an indulgence can be shown by this Court, under which, the matter can been remitted back to the respondent for re-consideration. The matter is remitted back to the respondent for reconsideration - petition allowed by way of remand.

Summary

Issues:
1. Compliance with court orders regarding tax assessment under TNVAT Act.
2. Alleged failure to comply with conditions imposed by the court.
3. Legality of attaching petitioner's bank account for tax recovery.

Issue 1: Compliance with court orders regarding tax assessment under TNVAT Act
The petitioner sought a Writ of Certiorari to challenge the impugned proceedings of the first respondent under the TNVAT Act for the assessment years 2012-2016. The petitioner had previously approached the Court in 2018 regarding tax assessments and was directed to pay 15% of the tax demanded and submit objections within a specified period. The petitioner complied with the first condition by paying the demanded tax within the stipulated time. However, there was a dispute regarding whether the petitioner had submitted a reply to treat the assessment orders as show cause notices within the given timeframe.

Issue 2: Alleged failure to comply with conditions imposed by the court
The petitioner claimed to have submitted the required reply within the specified time frame, while the Revenue contended that no such reply was received or acknowledged. The Revenue argued that as the petitioner did not comply with the second condition imposed by the Court in the previous order, they were entitled to proceed with tax recovery, leading to the attachment of the petitioner's bank account. The Court noted the lack of proof of the petitioner's reply and concluded that the second condition had not been fulfilled, allowing the Revenue to take action for tax recovery.

Issue 3: Legality of attaching petitioner's bank account for tax recovery
The Court acknowledged that there was no procedural irregularity in the Revenue's decision to attach the petitioner's bank account due to the non-compliance with the court's conditions. However, considering the tax demand and penalty amount, the Court directed the petitioner to pay 50% of the due amount within a specified time frame for the matter to be reconsidered by the Revenue. If the petitioner failed to comply with this condition, the Revenue was authorized to proceed with further recovery actions. The Court ordered that upon payment of the required amount, the attachment of the petitioner's bank account would be lifted, and assessment proceedings would be conducted within a specified period.

This detailed analysis of the judgment highlights the issues related to compliance with court orders, failure to adhere to conditions, and the legality of the bank account attachment for tax recovery under the TNVAT Act.