The Madras High Court directed the GST Department to take action against Officials causing revenue loss to the State.
The petitioner, GE Govindaraj, sought to quash a 2012 notice of the Assistant Commissioner in Arisipalayam Assessment Circle in Salem district. The notice sought to recover sales tax arrears for 2000-01 and 2001-02.
Mr.S.Rajasekar, the counsel for the petitioner stated that he had purchased the property through Sale Deed over an extent of 3017 3⁄4 sq.ft., with building from the second respondent. The second respondent, in fact, purchased the subject property by way of Sale Deed.
The counsel for the petitioner reiterated that the petitioner was a bona fide purchaser and purchased the subject property in the year 2006 itself. The impugned notice was issued after a lapse of about 11 years for the sales tax arrears due and six years after the purchase of the subject property by the petitioner.
Mr.P.Nanmaran, appearing on behalf of the respondent, made a submission that from the year 2006 onwards, several letters were communicated to the second respondent/defaulter and there was no proper response from the second respondent/defaulter. Finally, the respondent has initiated action under the Revenue Recovery Act and issued notice, directing the petitioner to pay the sales tax arrears, within a period of seven days, failing which the subject property will be attached under the provisions of the Tamil Nadu General Sales Tax Act, 1959.
The Single Judge Bench of Justice S.M.Subramaniam ruled that if the misconduct or otherwise is proved, then further actions are to be initiated to recover the loss of State revenue from those officials.
The court directed the department to issue suitable orders to all subordinate authorities to identify the cases where no actions are taken or taken belatedly regarding the collection of tax or arrears of tax.
Issuing the directions to the Secretary, Commercial Taxes and Registration and the Commissioner, Commercial Taxes, the court also asked them to initiate appropriate action against all who are responsible and accountable for such lapses, negligence or dereliction of duty.
The judge noted the authority had initiated action to recover the arrears after lapse of 10 years, which was against the TNGST Rules. The High Court, being the custodian of the Constitution, is duty bound to ensure that the constitutional principles are protected for the welfare of the citizen in general and failure of the authorities in this regard, are to be suitably dealt with.
“The two authorities shall coordinate with the Department of Vigilance and Anti-Corruption by conducting frequent surprise raids to control the evil menace of corrupt activities of demand and acceptance of bribes or receipt of freebies from the business community across the State,” the court said.
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