Amar Construction Company PVT. LTD. vs. The State Of Bihar And Ors

Held

The Court quashed and set aside the notice under Section 47 of the Bihar Value Added Tax Act, 2005, dated 18.01.2019. The reasoning was primarily based on the hurriedness with which the notice was issued and the fact that the petitioner had already filed a statutory appeal before the Commercial Taxes Tribunal. The Court acknowledged that the petitioner would have the liberty to raise all issues, including those concerning the alleged non-application of mind, before the Appellate Authority. The Court noted that no materials were presented by the State to contest the petitioner's plea regarding the hurried issuance of the notice. The Court also directed that any recovery made consequent to the impugned attachment notice would abide by the final outcome of the proceedings before the Appellate Authority. The issue of the merits of the assessment order itself was expressly left to be decided by the Commercial Taxes Tribunal.

Facts

The petitioner, Amarpur Construction Company Pvt. Ltd., challenged an order dated 17.01.2019 by the Commercial Tax Officer, Bhagalpur, and a demand notice dated 18.01.2019, issued under Section 47 of the Bihar Value Added Tax Act, 2005. These notices directed banks to pay Rs. 20,92,293/- towards penalty under the Act and Rs. 3750/- under the Central Sales Tax Act for the period 2012-13. The petitioner argued that the order was passed on the same day the deposit was due, without waiting for the deadline. Furthermore, the proceedings originated from an audit objection under Section 26 read with Rule 22, but the audit report itself accepted the petitioner's input tax credit claim, albeit with minor modifications. The petitioner had already filed an appeal before the Commercial Taxes Tribunal against the merits of the order. The impugned notice under Section 47 led to the attachment of the petitioner's bank account, hindering business operations.

Key Issues

1. Whether the notice of demand dated 18.01.2019, issued under Section 47 of the Bihar Value Added Tax Act, 2005, is liable to be quashed on grounds of hurriedness and non-application of mind by the authority, considering the pendency of a statutory appeal before the Commercial Taxes Tribunal? Petitioner's arguments: The petitioner contended that the order and demand notice were issued prematurely, on the very day the deposit was due, without allowing the deadline to pass. They argued that the Commercial Tax Officer failed to consider the audit report, which acknowledged the petitioner's input tax credit claim, demonstrating a lack of application of mind. The petitioner also highlighted that the attachment of bank accounts under Section 47, while an appeal on the merits was pending before the Tribunal, severely impacted their business operations. Revenue's arguments: The judgment does not record any specific arguments made by the State respondents regarding the validity of the Section 47 notice or the alleged hurriedness in its issuance.