2013 (4) TMI 73 - HC - VAT and Sales Tax

Court emphasizes procedural fairness in tax assessment, directs timely appeal resolution, suspends coercive actions.

ST. MARY´S HOTELS (P) LTD., Versus COMMERCIAL TAX OFFICER & ANR.

The court allowed the writ petition, emphasizing the importance of procedural fairness in tax assessment matters. The judgment highlighted the need for ... Stay - Coercive proceeding for recovery - Directing to deposit a portion of the disputed liability - Held that:- It is very much evident that the only basis for fixing the liability is with reference to the figures referred to by the Intelligence Wing. True, the penalty proceedings and the assessment proceedings are two different lines/streams. But since no other ground is discernible from Ext.P2 for fixing the liability, than the alleged suppression discovered by the Intelligence Wing, this Court finds considerable force in the submission made by petitioner and holds it appropriate to have the appeals preferred by the petitioner considered and disposed of within a reasonable time. The second respondent is directed to consider and pass final orders on Exts.P3 to P5 appeals, on merits, in accordance with law, at the earliest at any rate within two months from the date of receipt of a copy of this judgment. Coercive proceedings pursuant to Exts.P6 and P7 series shall be kept in abeyance till such time, subject to the condition that the petitioner executes and furnishes a security bond before the first respondent with regard to the liability sought to disputed. Issues Involved:Challenging assessment orders for multiple years, coercive proceedings, interim order directing deposit, discretionary jurisdiction of the court, remand of penalty order, consideration of appeals, abeyance of coercive proceedings, security bond requirement.Analysis:The petitioner challenged assessment orders for three consecutive years, citing coercion due to ongoing proceedings and dissatisfaction with the condition imposed by the appellate authority to deposit a portion of the disputed liability for interim stay. The petitioner contended that the assessment orders were solely based on Intelligence Wing proceedings, overlooking the remand of penalty order by the appellate authority, which was not considered in the interim order. The government pleader argued that the condition imposed was minimal, but the petitioner emphasized procedural irregularities rather than the quantum of liability.The appellate order set aside the penalty and remanded the matter for fresh consideration due to procedural deficiencies by the Intelligence Officer. The court noted that the assessment orders heavily relied on Intelligence Wing findings, urging a prompt review of the appeals filed by the petitioner. Consequently, the court directed the appellate authority to finalize the pending appeals within two months, suspending coercive proceedings temporarily contingent on the petitioner furnishing a security bond for the disputed liability.In conclusion, the court allowed the writ petition, emphasizing the need for a timely resolution of the appeals and the importance of procedural fairness in tax assessment matters. The judgment highlighted the distinction between penalty and assessment proceedings, underscoring the requirement for proper verification and opportunity for the appellant during the assessment process. The court's decision aimed to ensure a just outcome by addressing the procedural lapses and expediting the resolution of the appeals while maintaining a balance between the interests of the petitioner and the tax authorities.