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Court invalidates tax officer's actions, orders refund & penalty The court found the Excise & Taxation Officer's actions arbitrary and illegal in taking cheques without proper justification and encashing one without ...
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The court found the Excise & Taxation Officer's actions arbitrary and illegal in taking cheques without proper justification and encashing one without authorization. The provisional assessment order was deemed biased and quashed. The court ordered a refund of Rs. 3,10,000 to the petitioner, imposed a penalty of Rs. 10,000 on the officer, and directed an impartial officer to conduct assessment proceedings within two months. The remaining cheque was to be returned to the petitioner, with instructions for pending assessment proceedings. The writ petition was concluded in favor of the petitioner.
Issues: Challenge to action of Excise & Taxation Officer in taking cheques without liability and notice.
Analysis: The petitioner, a registered firm under the Punjab Value Added Tax Act, challenged the action of the Excise & Taxation Officer in taking two cheques amounting to Rs. 3 lacs each without any liability or notice. The petitioner alleged coercion and threats by the officer, who took the cheques under the pretext of anticipated tax liability due to discrepancies found during an inspection. The officer encashed one of the cheques without proper authorization, leading to the filing of the writ petition seeking an independent inquiry.
In response, the officer defended the action stating that the cheques were voluntarily submitted during inspection due to irregularities in maintaining records and evasion of tax. A provisional assessment order was passed, adjusting one cheque against the assessed amount, leaving a balance due. The court noted that the authorities acted arbitrarily and illegally, especially in the absence of a formal assessment or demand against the petitioner.
The court found the actions of the authorities to be arbitrary and high-handed, especially the encashment of one cheque without proper justification. The provisional assessment order, passed during the pendency of the writ petition by an officer involved in the initial inspection, was deemed biased and quashed. The court ordered a refund of Rs. 3,10,000 to the petitioner and imposed a penalty of Rs. 10,000 on the officer for arbitrary actions. The remaining cheque was to be returned to the petitioner, with instructions to maintain a specific amount in the bank account for pending assessment proceedings.
The court directed that the assessment proceedings be conducted by an impartial officer not associated with the initial inspection, to be completed within two months. Any future demands were to be recovered in accordance with the law, allowing the petitioner to appeal if necessary. The original case record was to be returned to the Additional Advocate General for further action, concluding the writ petition in favor of the petitioner.
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