2016 (1) TMI 283 - HC - VAT and Sales Tax

Reversal of ITC for non production of declaration forms and non issuance of notice before imposing tax under other category - Held that - Admittedly, challenging the assessment order for the year 2011-12, the petitioner preferred an appeal and the same was returned for rectifying certain mistakes and for production of proof for payment of 25% of disputed tax. Accordingly, the petitioner, complying those defects, re-submitted the papers, but, till date, the appeal has not been taken up for consideration. In the meanwhile, the petitioner came to understand by letter dated 11.09.2015 of the 3rd respondent Bank stating that their Bank account was attached pursuant to the order dated 10.08.2015 enclosing Form U for attachment of the balance amount in their account. - petitioner is directed to pay 25% of the disputed tax other than the amount of 25% already deposited and on production of proof of such payment - Petition disposed of.

Summary

Issues:
Challenging assessment order for the year 2011-12, Bank account attachment, Delay in appeal consideration

Analysis:

Challenging Assessment Order:
The petitioner, a dealer in Seamless & ERW boilers Tubes, challenged the order of the respondent dated 10.08.15, regarding the determination of total and taxable turnover for the assessment year 2011-12. The petitioner reported a different turnover than what was determined by the respondent, leading to tax and penalty imposition. The petitioner contended that the correct rate of tax was not calculated by the respondent, and despite representations, the respondent issued a bank attachment order without proper notice. The petitioner approached the officer to correct the turnover and tax adjustments, but the respondent imposed taxes and penalty under a different category. The respondent insisted on a 25% tax payment to withdraw the bank attachment, which was done by the petitioner. The petitioner's appeal before the 2nd respondent regarding reversal of ITC and non-issuance of notice was delayed due to certain defects in the appeal papers, leading to further complications.

Bank Account Attachment:
The petitioner's bank account was attached pursuant to the order dated 10.08.15, causing financial restrictions. The petitioner represented before the 1st respondent and the 2nd respondent about the arbitrary bank attachment, emphasizing the ongoing appeal process and the lack of progress in addressing the issue. The respondent issued bank attachment notices without proper communication, adding to the petitioner's grievances. The petitioner highlighted discrepancies in the attachment order, pointing out the absence of relevant proceedings on the mentioned date.

Delay in Appeal Consideration:
The appeal filed by the petitioner against the assessment order for the year 2011-12 faced delays due to defects in the appeal papers and the requirement to produce proof of payment of disputed tax. The appellate authority did not take up the appeal for consideration despite the petitioner's compliance with rectifying the defects. The delay in appeal consideration led to further complications, including the petitioner's bank account being attached, causing financial distress.

In conclusion, the High Court directed the petitioner to pay 25% of the disputed tax, other than the amount already deposited, to lift the bank attachment. The appellate authority was instructed to entertain the appeal, decide on merits, and provide due opportunity to the petitioner. The judgment aimed to address the challenges faced by the petitioner concerning the assessment order, bank account attachment, and the delay in appeal consideration, ensuring a fair resolution of the issues raised.