The Madras High Court (HC) in a recent judgement quashed the recovery of Value Added Tax (VAT) dues and penalty during the pendency of the appeal.
Hotel Sakithyan, the petitioner has challenged the impugned proceedings dated 13.02.2023 of the first respondent ie, the Assistant Commissioner (Sales Tax),
Under the impugned proceedings, the first respondent has communicated to the second respondent bank that a sum of Rs.40,96,402/- is due and payable by the petitioner towards arrears of tax and penalty under the TNVAT Act, 2006 and the arrears pertain to the years 2012-13, 201314, 2014-15, 2015-16 and 2016-17.
The petitioner has already filed a statutory appeal against the assessment order dated 20.01.2021 passed under section 27 of the TNVAT Act, 2006 which is pending on the file of the Appellate Deputy Commissioner of Commercial Taxes on 30.04.2021.
The petitioner has also made the statutory pre-deposit amount before the Appellate Authority and also filed a stay application seeking a stay of the assessment order dated 20.01.2021. The first respondent has recovered a sum of Rs.28,49,000/- which was lying to the credit of the petitioner’s bank account maintained with the second respondent bank and the said amount was debited from the petitioner’s bank account on 13.02.2023.
It was apprehended by the petitioner that the penalty amount of Rs.20,48,201/- is likely to be recovered by the first respondent from the amount lying to the credit of the petitioner’s bank account with the second respondent bank. The petitioner was made liable to pay an equal sum towards the penalty amount.
A Single member Coram comprising Justice Abdul Quddhose granted a stay of any further recovery because the statutory appeal has already been filed by the petitioner by making a statutory pre-deposit amount and the first respondent has also recovered the sum of Rs.28,49,000/- from the petitioner’s bank account lying with the second respondent after the filing of the statutory appeal by the petitioner.
The Court directed the third respondent to pass final orders on merits and by law on the petitioner’s statutory appeal dated 13.04.2021 filed challenging the assessment orders within a period of twelve weeks from the date of receipt of a copy of this order.
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