Lawful tax recovery requires a valid assessment order and notice of demand before coercive collection can proceed.

Coercive tax recovery under the Tamil Nadu Value Added Tax Act cannot be sustained unless it is supported by a lawful assessment order and a valid notice of demand issued in accordance with the statutory procedure. A recovery notice demanding cash and penalty was found to be authority because no assessment order or notice of demand was shown. The Court quashed the demand and required the taxpayer to be given notice of assessment and a personal hearing, after which the authority must complete assessment and pass a fresh order on merits.

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Issues: Whether a recovery notice demanding cash and penalty could be sustained in the absence of an assessment order or a notice of demand, and whether the matter required fresh assessment proceedings.

Analysis: The notice was issued without the respondents showing any assessment order or notice of demand. In tax proceedings under the Tamil Nadu Value Added Tax Act, recovery for alleged arrears must follow a lawful assessment process, and where recovery is sought after completion of assessment, the appropriate statutory procedure must be followed. The Court found that the impugned demand was issued without the necessary foundational orders and was therefore without authority.

Conclusion: The recovery notice was quashed. The petitioner was entitled to notice of assessment and personal hearing, after which the respondent was required to complete the assessment and pass a fresh order on merits.

Final Conclusion: The challenge succeeded because coercive recovery was attempted without the basic statutory preconditions for assessment and demand having been satisfied, and the matter was left to be proceeded with in accordance with law from the assessment stage.

Ratio Decidendi: Coercive tax recovery cannot be sustained unless it is founded on a lawful assessment order and a valid notice of demand issued in accordance with the statutory procedure.

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