2023 (3) TMI 123 - HC - VAT and Sales Tax

Recovery of dues - Attachment of Bank Account of petitioner - attachment on the ground that a Statutory Appellate Authority has quashed the assessment order and remanded the matter for fresh consideration - non-application of mind - violation of principles of natural justice - HELD THAT - Admittedly, in respect of the assessment year 2016-17, the assessment order was in entirety quashed and remanded back to the first respondent for fresh consideration, on merits and in accordance with law and in respect of the assessment year 2015-16, some of the operative portion of the assessment order was quashed and without giving any notice to the petitioner, prior to the attachment and the dues of the recovery notice, the first respondent has attached the back account, lying in the bank account of the petitioner and maintained with the fourth respondent Bank, which in the considered view of this Court, is arbitrary and has been passed by total non application of mind. Insofar as the second submission made by the learned counsel for the petitioner with regard to the refund of the money, lying in the petitioner's bank account, maintained with the fourth respondent Bank, is concerned, the petitioner will have to give a representation for the same to the respondents - No prejudice would be caused to the respondents if the said representation is directed to be considered by the first respondent, on merits and in accordance with law within a time frame to be fixed by this Court. The impugned recovery notice as well as the consequential bank attachment in Form U in respect of the bank account of the petitioner, maintained with the fourth respondent are hereby quashed - Petition allowed.

Summary

Issues:
Challenge to recovery notice and bank attachment without valid assessment order.

Analysis:
The petitioner filed a writ petition challenging a recovery notice dated 06.02.2023 and a consequential bank attachment dated 22.02.2023 issued by the first respondent. The petitioner argued that since a Statutory Appellate Authority had quashed the assessment order and remanded the matter for fresh consideration, the recovery of the amount through the impugned notices was not justified as there was no valid assessment order in place.

The petitioner's counsel highlighted the order of the Appellate Authority dated 22.02.2023, which quashed and remanded the assessment orders of 06.03.2020 and 26.09.2020 back to the first respondent for fresh consideration. It was contended that the recovery notice and bank attachment were arbitrary and lacked proper application of mind, as they were issued without a valid assessment order.

The Government Advocate representing the respondents did not dispute the petitioner's submissions. It was acknowledged that for the assessment year 2016-17, the assessment order was entirely quashed and remanded, while for the assessment year 2015-16, only a portion of the assessment order was quashed. The court noted that the attachment of the petitioner's bank account without prior notice was arbitrary and lacked proper consideration.

The petitioner's counsel further argued that an amount of Rs.3,54,000 had been erroneously withdrawn from the petitioner's bank account despite the quashing of the assessment orders. It was requested that the withdrawn amount be refunded by the respondents.

The court directed the quashing of the recovery notice and bank attachment, allowing the writ petition. The petitioner was granted permission to represent to the first respondent for the refund of the wrongfully withdrawn amount within two weeks. The first respondent was instructed to make a decision on the representation within four weeks, ensuring a fair consideration in accordance with the law.

In conclusion, the recovery notice and bank attachment were deemed invalid, and the petitioner was given the opportunity to seek a refund of the wrongfully withdrawn amount through a representation to be considered by the first respondent within a specified timeframe.