M/S Balaji Dall Industries vs. The Assistant Commissioner
Original PDF →No AI summary yet for this judgment.
HON'BLE SRI JUSTICE U. DURGA PRASAD RAO AND HON’BLE MS. JUSTICE J. UMA DEVI
Writ Petition No.21442 of 2020
ORDER: (Per Hon’ble Sri Justice U.Durga Prasad Rao)
The challenge in this writ petition is to the Garnishee notice dated 23.10.2020 issued by 1st respondent under Section 29 of the Andhra Pradesh Value Added Tax Act, 2005 (for short, ‘the VAT Act’) to the petitioner demanding tax amount of Rs.2,13,753/- due to the Department under the Central Sales Tax Act, 1956 (for short, ‘the CST Act’) for the tax period 2014-15 by the petitioner.
The petitioner’s case briefly is thus:
(a) The petitioner is carrying on business in Pulses and Dalls and is a dealer on the rolls of 1st respondent under the CST Act and the VAT Act. As per the audit assessment proceedings of 1st respondent, dated 07.07.2018, the petitioner is entitled to ITC of Rs.6,15,479/- as on 30.06.2017. The Pulses and Dalls are liable to tax @ 5% under IV Schedule of the VAT Act. It is pertinent to note that under the GST Act, 2017, the Pulses and Dalls are exempted from payment of GST.
(b) For the tax period 2014-15 to 2016-17, the 1st respondent (Commercial Tax Officer) completed the assessment, as per which the petitioner is liable to pay CST of Rs.2,06,252/-. The petitioner vide representation dated 03.10.2019 requested the 1st respondent to adjust the tax dues to the Department with the ITC entitled to by the petitioner as per the assessment order passed under the VAT Act.
2
Instead of considering the said representation, the 1st respondent has issued an Endorsement dated 20.10.2020 stating that the petitioner is entitled to claim refund of ITC as on 30.06.2017, and the demands raised under the CST Act shall be paid immediately along with penal interest; failing which recovery will be initiated under Section 29 of the VAT Act and the Revenue Recovery Act. The petitioner vide representation dated 20.10.2020 requested the 2nd respondent to await response from 1st respondent, to whom the petitioner made a representation for adjustment of CST tax dues with the ITC refund. However, to the utter surprise and dismay of the petitioner, the 1st respondent issued Garnishee notice dated 23.10.2020 in Form VAT 206 to the petitioner’s Bank i.e., 4th respondent herein demanding payment of tax of Rs.2,13,753/- which was due from the petitioner, even without serving a copy of notice to the petitioner. In response thereof, the 4th respondent issued a letter dated 26.10.2020 proposing to send the amount to 1st respondent, from out of the amounts lying to the credit of the petitioner’s current account as well as Overdraft account with 4th respondent Bank. The 1st respondent, contrary to the provisions of the VAT Act, has initiated proceedings without authorization. The 1st respondent ought to have adjusted the tax due from the CST demands with the ITC.
Hence, the writ petition.
Heard Sri Shaik Jeelani Basha, learned counsel for petitioner, and learned Government Pleader for Commercial Tax representing the respondents 1, 2, 3 & 5. 3
The petitioner mainly contends that the petitioner has an excess ITC of Rs.6,15,477/-, which is far higher than the CST demanded for the period 2014-15 to 2016-17 and hence, the 1st respondent ought to have considered the representations of the petitioner to adjust the tax to the ITC . Neither such an adjustment was made nor an opportunity of hearing afforded to the petitioner. He thus requested to remand the matter to 1st respondent.
Having found prima facie force in the submission of the learned counsel for petitioner, this writ petition is disposed of and the Garnishee Notice dt. 23.10.2020 issued by 1st respondent is set aside, and the matter is remitted back to 1st respondent with a direction to consider the representations of the petitioner dated 03.10.2019 & 20.10.2020 and after affording personal hearing to him, pass an appropriate order in accordance with the governing law and Rules regarding the claim of petitioner for adjustment of ITC against the assessed tax. The entire exercise shall be completed within four (4) weeks from the date of receipt of a copy of this order. No costs.
As a sequel, miscellaneous applications pending for consideration, if any, shall stand closed. _________________________ U.DURGA PRASAD RAO, J
______________ J.UMA DEVI, J 16.02.2021 MVA
4
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.