2025 (2) TMI 943 - HC - VAT / Sales Tax

Appeals dismissed for tax search proceedings under Assam VAT Act lacking proper procedural compliance

M/s. Suraksha Steel Co., M/s. Sri Krishna Enterprise, Versus The State of Assam, The Commissioner of Taxes, Assam, The Additional Commissioner of Taxes, Assam, Guwahati, The Joint Commissioner of Taxes, Guwahati, The Deputy Commissioner of Taxes, Guwahati, The Superintendent of Taxes, Dhubri, Assam, The Superintendent of Taxes, Office of the Deputy Commissioner of Taxes, Guwahati.

The Gauhati HC dismissed appeals challenging search and seizure proceedings under the Assam Value Added Tax Act, 2003. The Single Judge found that ... Challenge to search and seizure proceedings conducted in the appellants’ Firm by the Taxation Authorities, in exercise of powers conferred under Sections 74 (3) and 74(4) of the Assam Value Added Tax Act, 2003 - main contention raised by the appellants before the Writ Court was that the respondent authorities had conducted the aforesaid search and seizure proceedings without following the due process of law - HELD THAT:- The learned Single Judge, while taking into consideration the provisions of the Code of Criminal Procedure, 1973 in Sections 46, 47, 51 and 100, has come to the conclusion that while conducting the search and seizure proceedings, the respondent authorities ought to have followed the procedure laid down under Sections 47 and 100 of the Code of Criminal Procedure, because detail procedure for search and seizure has not been provided in the Assam Value Added Tax Act, 2003. At the same time, the learned Single Judge has not interfered with the search and seizure proceedings effected way back on 03.09.2014, while observing that since much time had already elapsed after conducting the search and seizure proceedings, it may not be necessary to make any further observation except to hold that if any cause of action still survives, the appellants will be at liberty to approach the appropriate forum. It is to be noticed that while passing the impugned order on 05.11.2019, no one appeared on behalf of the appellants before the learned Single Judge. Since in the order dated 05.11.2019 passed in WP(C) No. 6363/2014 and WP(C) No. 6364/2014 and orders dated 25.01.2021 passed in I.A. (Civil) No. 956/2020 and I.A. (Civil) No. 1262/2020 the learned Single Judge has kept it open for the appellants to challenge the validity of the assessment order and the notice of demand issued during the pendency of the writ petitions, or after disposal of the writ petitions, no further order is required to be passed in these writ appeals. Appeal dismissed. The High Court considered writ appeals arising from a common order dated 05.11.2019 in WP(C) No. 6363/2014 and WP(C) No.6364/2014, along with orders dated 25.01.2021 in I.A. (Civil) No. 956/2020 and I.A. (Civil) No.1262/2020. The appellants challenged search and seizure proceedings conducted by Taxation Authorities under Sections 74 (3) and 74(4) of the Assam Value Added Tax Act, 2003, alleging a lack of due process. The respondent State contended that the procedures were duly followed.The learned Single Judge considered the Code of Criminal Procedure, 1973, Sections 46, 47, 51, and 100, noting the absence of detailed search and seizure procedures in the Assam Value Added Tax Act, 2003. The Judge observed that the search and seizure proceedings should adhere to the CrPC provisions. Despite not interfering with the past proceedings due to elapsed time, the appellants were granted liberty to seek redress if a cause of action persisted.Subsequently, the appellants filed I.A. (Civil) No. 956/2020 and I.A. (Civil) No.1262/2020 seeking to declare the search and seizure as illegal and challenge related assessment orders and demand notices. The Court, in its orders dated 25.01.2021, emphasized that the appropriate forum should be approached for challenging the demand notices issued post the writ petitions' disposal.The Court dismissed the appeals, noting that the Single Judge had allowed the appellants to contest the assessment orders and demand notices separately, precluding the need for further orders.In summary, the issues considered included the legality of search and seizure proceedings, compliance with procedural requirements, the validity of assessment orders and demand notices, and the appropriate forum for challenging subsequent actions. The Court's decisions were based on the absence of specific search and seizure provisions in the tax act, adherence to CrPC guidelines, and the need for separate challenges to post-petition actions.