Pre-assessment bank attachment for alleged tax dues is invalid without assessment, notice of demand, and hearing.

Recovery of alleged tax dues under the Tamil Nadu Value Added Tax Act, 2006 cannot be made on the basis of inspection findings alone. Section 65 permits inspection, verification, seizure of records and inquiry, but does not authorise immediate pre-assessment recovery or bank attachment. Recovery must proceed through the assessing authority after assessment and notice of demand under Section 45. Because the bank account was attached without prior notice, an opportunity to explain the discrepancies, or any assessed demand, the action bypassed the statutory procedure and violated natural justice. The bank attachment notice was therefore held illegal and unsustainable.

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Issues: Whether the bank attachment and recovery notice issued before completion of assessment and without prior notice and opportunity of hearing were valid under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: Section 65 of the Tamil Nadu Value Added Tax Act, 2006 permits inspection, verification, seizure of records and inquiry, but does not authorise immediate recovery of tax merely on the basis of detected discrepancies. Section 45 contemplates recovery only through the assessing authority and only after a due assessment and notice of demand. The attachment of the petitioner's bank account was made straightaway after inspection, without issuing a notice pointing out the discrepancies, without affording an opportunity to explain, and without any assessed demand. Such pre-assessment recovery bypassed the statutory procedure and offended the principles of natural justice.

Conclusion: The bank attachment notice was illegal and unsustainable; it was set aside and the writ petition was allowed.

Ratio Decidendi: Recovery of alleged tax dues under the Tamil Nadu Value Added Tax Act, 2006 cannot be effected before assessment and notice of demand, and inspection powers do not include authority for immediate pre-assessment attachment without hearing the assessee.

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