2022 (11) TMI 494 - HC - VAT and Sales Tax

Recovery of tax and penalty - excess input tax credit availed - arithmetical mistake in the order - HELD THAT - A perusal of the averments in the counter affidavit of the 4th respondent would show that the Commercial Tax Officer, Puttur has noticed arithmetical mistakes in the consequential order dated 11.01.2018, as CTO has taken opening Input Tax Credit of Rs.26,50,970/- instead of Nil opening Input Tax Credit and passed revised order for the tax periods from October 2012 to March 2014 and determined balance tax of Rs.44,75,595/-. Suppressing the said fact, the petitioner filed an application for collection of the tax at Rs.26,82,906/- instead of Rs.44,75,575/- The said authority had granted stay on a condition of deposit of 50% of the tax of Rs.26,82,906/-. The petitioner had paid Rs.6,70,727/- only. It is further stated that the Deputy Commercial Tax Office had issued several notices requesting the petitioner to pay the amounts payable by the petitioner as per the stays granted by this Court, as well as Additional Commissioner (CT) (Legal), but no amounts have been paid. The 4th respondent also issued notices, but in vain. Since the petitioner failed to pay the entire amount due towards tax and penalty, consequential proceedings came to be initiated. It is further specifically stated in the counter that the revisional authority i.e., Deputy Commissioner of Commercial Taxes, Chittoor has not revised the entire orders passed by the assessing authorities and the revised and restricted Input Tax Credit claimed by the petitioner is only based on the revisional orders of the Deputy Commissioner of Commercial Taxes, Chittoor - the jurisdiction Commercial Tax Officer is said to have passed the effectual orders and determined the balance tax payable by the petitioner and also levied penalty. Since there is dispute with regard to payments made by the petitioner and as issue involves factual aspects also apart from the orders passed, it would be just and proper to direct the assessing authority-1st respondent to consider the matter afresh after giving an opportunity of personal hearing to the petitioner, as early as possible - petition disposed off.

Summary

Issues:
Challenge to Garnishee Notice under Article 226 of the Constitution of India.

Analysis:
The petitioner filed a Writ Petition challenging the Garnishee Notice issued for the recovery of tax and penalty amounting to Rs.1,09,38,116. The petitioner contended that the assessment orders, revisional orders, and penalty orders passed by the authorities were disputed, leading to confusion regarding the actual amount due. The petitioner had made payments based on interim orders and appealed against various orders. The respondent disputed the petitioner's claims, stating arithmetical mistakes in the orders passed and non-compliance with payment requests. The court noted the factual disputes and directed the assessing authority to reconsider the matter after providing the petitioner with a personal hearing. The court instructed the petitioner to approach the authority with relevant documents for a fresh assessment. The Garnishee Notice was to remain in force until a new order was passed.

This judgment highlights the importance of proper assessment and clear communication between tax authorities and taxpayers. It emphasizes the need for accurate calculations and compliance with payment requests. The court's decision to allow the assessing authority to review the matter showcases the significance of procedural fairness and the opportunity for taxpayers to present their case effectively. The directive for a fresh assessment with a personal hearing ensures transparency and due process in resolving tax disputes. Overall, the judgment aims to address the factual discrepancies and provide a fair opportunity for both parties to present their arguments before a final decision is made.