2022 (12) TMI 594 - HC - VAT and Sales Tax

Stay of demand - Reassessment proceedings were initiated upon audit objection - lack of proper notice in the statutory Form XIV as prescribed in terms of Rule 20 of Bihar Sales Tax Rules, 1983. - Learned counsel for the State prays for and is allowed four weeks time to file counter affidavit. Two weeks time thereafter is allowed to the petitioner to file reply, if so advised. HELD THAT - In the meantime, subject to deposit of 20% of the tax of Rs. 6,64,65,700/- in the State Exchequer through challan within a period of 15 days from today, no coercive steps be taken against the petitioner.

Summary

Issues:
1. Ignoring defect and exemption from filing certified copy of Annexure-9.
2. Validity of reassessment proceedings initiated upon audit objection.
3. Allegation of lack of proper notice in statutory Form XIV for reassessment proceedings.
4. Applicability of decision in State of Jharkhand and others versus Bihar Sponge Iron Ltd. case.
5. Request for interim protection against coercive steps pending the legal proceedings.

Analysis:
1. The Interlocutory Application No. 9617/2022 sought to ignore a defect and exemption from filing a certified copy of Annexure-9, which is the photocopy of the appellate order. The petitioner argued that since the record was with the Commercial Taxes Tribunal, the certified copy could not be obtained, and requested the defect to be ignored. The court agreed and disposed of the application.

2. The writ petition challenged the judgment of the Commercial Taxes Tribunal regarding reassessment proceedings initiated based on an audit objection. The petitioner contended that the breakup of income for the Steel Division was erroneously added to the turnover, resulting in a tax liability. The petitioner alleged that proper opportunity to present evidence was not provided, and the Tribunal upheld the reassessment order without due consideration. The petitioner also raised concerns about the lack of proper notice in the statutory Form XIV, citing a technical objection.

3. The petitioner relied on a previous decision by the Apex Court in a similar case to argue that the reassessment proceedings suffered from the same infirmity related to the notice issued for initiation. The petitioner highlighted discrepancies between the notice dated 12.01.2009 and the statutory notice required under the relevant laws. The petitioner expressed apprehension about coercive steps based on a demand notice and sought interim protection.

4. The State was granted time to file a counter affidavit, and the petitioner was given an opportunity to respond. The court directed the petitioner to deposit 20% of the tax amount in the State Exchequer within a specified period to prevent coercive actions. The Interlocutory Application No. 9618/2022 was disposed of accordingly, providing interim relief to the petitioner pending further legal proceedings.