Service of assessment orders and acquiescence can defeat a belated challenge to VAT recovery action.

An alleged defect in service of assessment orders did not invalidate recovery proceedings where the assessee had prior knowledge of the demand, participated in related proceedings, and failed to raise a timely objection. Rule 64 of the Telangana VAT Rules permits service on a company through specified modes, but the Court treated the service challenge as untenable because the assessee's conduct showed acquiescence and the objection was raised only belatedly. The recovery action and attachment notice were therefore sustained despite the complaint of non-service.

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Issues: Whether the assessee could challenge the recovery proceedings and attachment notice on the ground that the assessment orders for the relevant assessment years were not served in the manner prescribed by Rule 64 of the Telangana Value Added Tax Rules, 2005.

Analysis: Rule 64 prescribes the modes by which a notice or order may be validly served on a company, including personal service on the nominated person, service at the registered office or place of business, or service by registered post. The Court held that while an order carrying adverse consequences must ordinarily be served on the person affected, the factual matrix assumed significance. The assessee had earlier participated in proceedings, had been aware of the revenue's demand claims, had been impleaded in earlier litigation concerning the same liability, and had not disputed the pleaded tax dues or raised a contemporaneous objection that the assessment orders had not been served. The Court also noted that the assessee's later representations did not assert non-service as the basis for relief in a timely manner. In these circumstances, the plea of non-service was treated as untenable.

Conclusion: The challenge based on alleged non-service of the assessment orders failed, and the recovery proceedings and attachment notice were upheld in favour of the revenue.

Ratio Decidendi: Where the affected party had knowledge of the assessment demand and its conduct shows acquiescence or failure to raise a timely objection, an alleged irregularity in the manner of service does not invalidate the recovery action, especially when the statutory modes of service are substantially satisfied or the objection is belated.

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