The Allahabad High Court has reportedly censured the commercial tax department of Uttar Pradesh for using “dubious” means to withdraw Rs 49 crore from the bank accounts of online marketplace Flipkart in lieu of value-added tax dues, saying it will be difficult for business houses to function if the government departments were to function in such a “cavalier fashion”.
This was the second instance when the UP commercial tax department had withdrawn money from the accounts of Flipkart without notice. Earlier, it had withdrawn Rs 27 crore in a similar manner for VAT dues of three years.
A bench of Justice Vinod Kumar Misra and Justice Tarun Agarwala also imposed Rs 2 lakh cost on the erring tax officer and ordered him to pay the money to Flipkart. The bench said the move smacked of a “deliberate” attempt to withdraw money from the company’s accounts by passing assessment and attachment orders without issuing notice to the company.
The notice was served at Noida even though the company had sought a change in place of business in its VAT registration form to Ghaziabad, where it is now located. Soon after this, the tax department attached the company’s bank accounts and withdrew Rs 49.82 crore from them. The lawyers argued that without informing the company that its application for change of address has been rejected, the tax authorities kept sending VAT notices to its old address.
