2021 (6) TMI 1050 - HC - VAT and Sales Tax

Court sets aside property attachment order under TNGST Act, emphasizing tax compliance.

Bhagavan Textiles (Defunct) Versus The Commercial Tax Officer, Coimbatore.

The Court set aside the order of attachment of property in response to a challenge by a registered dealer under the TNGST Act, 1959, directing a fresh ... Validity of assessment order - recovery of tax dues - attachment of property - no opportunity was given to the writ petitioner before passing the order of attachment of his property - principles of natural justice - HELD THAT:- This Court is of the considered opinion that the order of attachment was set aside on the ground that no opportunity was provided to the writ petitioner. This Court directed the authorities to provide an opportunity and pass an order afresh. This will not disentitle the authorities to proceed with the matter on merits with reference to the tax arrears to be recovered from the assessee. This Court has not adjudicated the issues on merits. A simple direction was issued to provide an opportunity. Thus, for all purposes, the authorities competent are empowered to proceed with the actions in accordance with law and taking shelter on such direction issued in W.P.No.1305 of 2016, the petitioner cannot claim any exoneration from the liability regarding payment of arrears of tax. By litigating the order of attachment, the tax arrears as per the original assessment order cannot be exempted nor the petitioner be exonerated from the liability of tax to be paid. Thus, this Court is of an opinion that the said order passed in W.P.No.1305 of 2016 is for the purpose of providing an opportunity to the writ petitioner regarding the order of attachment. However, the order of attachment was passed based on the original assessment order and the petitioner claims that they had not received the original assessment order and therefore, the respondent issued a fresh notice in proceedings dated 22.04.2016, stating all the facts including the facts regarding the final assessment made by the competent authority and the order of assessment dated 28.02.2008. Thus, the petitioner was well within his knowledge about the order dated 28.02.2008 - the orders impugned states that the petitioner had no intention to file specific objection or appear for personal hearing or to pay the admitted tax as per their legal due to the Government. The findings in the impugned orders reveal that the petitioner was not only evasive, he had no intention to defend the case by availing the opportunity provided by the authorities competent. Contrarily, he is attempting to avoid payment of arrears of tax as demanded by filing litigation or other. This Court is of an opinion that the assessment orders impugned now under challenge in the present writ petitions are appealable orders under the provisions of the Act - this Court is not inclined to entertain the writ petitions on merits - Petition disposed off. Issues:Challenge to assessment orders dated 29.08.2016.Analysis:1. The petitioner, a registered dealer under the TNGST Act, 1959, closed the business and was served with Distrait proceedings for tax dues. The petitioner challenged the order of attachment of property, arguing no opportunity was given. The Court set aside the order, directing a fresh order after providing an opportunity to the petitioner.2. Another writ petition sought to quash orders and obtain copies of pre-assessment notices and assessment orders. The Court allowed the petition, quashing the distraint order and attachment, allowing the Assessing Officer to proceed with assessment in accordance with law.3. Subsequently, a fresh notice was issued to the petitioner, detailing the assessment of tax arrears. The petitioner was made aware of the tax dues and the order of attachment being set aside due to lack of opportunity.4. The petitioner contended that the assessment orders were erroneous as they did not align with the Court's directions in the previous writ petition regarding attachment. However, the Court clarified that setting aside the attachment did not absolve the petitioner of tax liabilities.5. The Court emphasized that the petitioner cannot be exempted from tax liabilities by challenging the attachment order. The order was solely to provide an opportunity, and the authorities were empowered to proceed with tax recovery actions in accordance with law.6. Despite the petitioner's claim of not receiving the original assessment order, the Court noted that the petitioner was informed through the fresh notice in 2016. The petitioner's lack of intention to defend the case or pay the admitted tax was highlighted in the impugned orders.7. The Court deemed the assessment orders appealable under the Act, allowing the petitioner to prefer an appeal if aggrieved. However, the Court declined to entertain the writ petitions on merits, disposing of them with liberty to appeal and no costs.