In a recent decision Tvl. Harikrishna Timbers v. The Commissioner of Commercial Taxes, the Madras High Court observed that the officers cannot compel the assessee to pay tax when the assessment proceedings under the Tamil Nadu VAT Act is pending.
In the instant case, the petitioner challenged the validity of the notices as per which the Assistant Commissioner directed him to pay tax along with interest. Though the petitioner issued cheques in favour of the department, however, when the same were sent for collection, they were returned with an endorsement ”Exceeds arrangement”. The petitioners challenged legality of the notices and submitted that the same were arbitrarily collected from him.He further contended that that the respondent Department has issued circulars instructing the officials not to insist upon the issuance of cheque even at the time of inspection and despite the instructions, the authorities have illegally snatched the cheque from the petitioner, and therefore, it must be ordered to be returned to the petitioner. The Department, on the other hand, contended that the payment was made by the petitioner voluntarily.
“There is no proof to show that there was an initial demand in writing and towards payment of the demand for tax, the cheque was issued by the petitioner. Even assuming that the petitioner is liable to pay any amount towards tax, the 2nd respondent being the Assessing Officer is entitled to proceed under the provisions of Tamil Nadu Value Added Tax Act for the collection of the tax demanded. Therefore, the method adopted in collecting the cheque is not valid.”
Read the full text of the Judgment below.
