Krishnamoorthi .P vs. The Assistant Commissioner (St)-3

On 15.03.2022, the petitioner received a notice from the 1st respondent in letter No.A1/603/2021 giving personal hearing opportunity with regard to the non-payment of TDS deduction from the civil contractors for the period commencing from 2010-2011 to 2016-2017. The complaint is for non-payment and for non-filing of any declaration form for TDS deduction. Hence, the objections were called for along with documentary proof from the Thiruthangal Municipality. The petitioner was surprised to receive such notice, wherein, he was directed to appear before the 1st respondent on 21.03.2022. 4.The petitioner was busy in the local body election, which was conducted under the directions of the State Election Commission. Thereafter, the petitioner and the staff appeared before the 1st respondent and made objections stating that the alleged non-payment has been kept pending for more than 12 years, for which now penal interest is also contemplated to be levied. The petitioner pointed out that earlier there was payment of Rs.25,96,954/-, which has been paid as follows:- “Date amount 04.04.2017 Rs.9,29,000/- 08.05.2018 Rs.10,00,000/- 24.07.2018 Rs.6,67,954/-” 3/12 https://www.mhc.tn.gov.in/judis https://www.mhc.tn.gov.in/judis

For the payment of the balance amount ie., Rs.26,27,017/-, further time was requested. The penal interest of Rs.72,18,039/- was asked to be waived, considering the fact that the petitioner is an arm of the Government. Due to the taking over of the Thiruthangal Municipality by the petitioner, they have to verify as to whether what are the payments to be made and whether the amount has been debited from the accounts of the contractors available in the erstwhile Thiruthangal Municipality. Considering the petitioner's request, the petitioner's Municipality was facing the authorities. The 1st respondent, by proceedings dated 28.03.2022 in Na.Ka.No.1658/2022/e1, agreed to waive and to receive a sum of Rs.5,21,629/- and the same has also been received by him towards tax balance. 6.This being so, to the shock and surprise, the 1st respondent by proceedings in ROC.No.A1/603/2021, dated 25.03.2022, directed the 2nd respondent to remit the amount of Rs.1,27,42,010/- immediately, which is lying in the account of the petitioner, as per Section 45 of the TNVAT Act, 2006. The 2nd respondent by his communication dated 04.04.2022 informed the petitioner that the amount of Rs.1,27,42,010/- has been debited from the petitioner's account on 31.03.2022. 4/12 https://www.mhc.tn.gov.in/judis https://www.mhc.tn.gov.in/judis

The contention of the petitioner is that the petitioner being an arm of the Government cannot be penalized for the mistake committed by the erstwhile Thiruthangal Municipality. Further, the Municipality made a representation to the 1st respondent stating that no account details are available and the record goes back to the year 2010-2011 to 2016-2017. At consequential direction to the 1st respondent to return back Rs.1,27,42,010/- to the credit of his account. 5/12 https://www.mhc.tn.gov.in/judis https://www.mhc.tn.gov.in/judis

The 1st respondent had filed a counter stating that the erstwhile Thiruthangal Municipality was merged with Sivakasi City Municipal Corporation. During the years 2013 to 2018, many contracts were awarded and recovered TDS amount of tax to the tune of Rs.55,23,971/-. While settling the bills to the contractors, they had recovered TDS amount to the tune of Rs.55,23,971/-. Though the erstwhile Thiruthangal Municipality recovered TDS amount, they have not paid the recovered amount of tax to the concerned Department, as required by Section 13 of the TNVAT Act, 2006. The Thiruthangal Municipality had kept the amount for years together and slept over on the payment of tax either deliberately or wantonly. 10.On knowing that the local fund audit of Local Fund Audit Department has raised audit objection during the course of local fund audit objection about the amount payable as on 31.03.2020 to the Commercial Taxes Department after a protracted correspondence, the Department initiated action and issued notices directing the erstwhile Thiruthangal Municipality and the Commissioner of Sivakasi Municipal Corporation to pay the deducted TDS amount, otherwise they have to face the consequences. To the petitioner's notice, personal hearing was provided. But none of the action evoked any action or response. The details of notice and personal hearings provided to the Commissioner of Sivakasi Corporation is as follows:- 6/12 https://www.mhc.tn.gov.in/judis https://www.mhc.tn.gov.in/judis Sl.No. Date of Notice Nature of Notice To Whom Response of Commissioner 1 ROC.A1.603/2021 dated 28.07.2021 Addressed to pay the TDS amount by RPAD received

The contention of the petitioner is false and misrepresentation. The payment of Rs.25,96,954/- is nothing to do with the action and recovery through attachment of bank account as the TDS amount of Rs.55,23,971/- is pending as on 31.03.2020, on which the recovery action are taken under Section 45 of TNVAT Act, 2006. The petitioner, if at all aggrieved, has to file an appeal or revision before the Deputy Commissioner under Section 51 of the TNVAT Act, 2006 within a period of 30 days, which is extendable by another 30 days. 13.The learned counsel for the 2nd respondent would submit that the 1st respondent issued a communication in Roc.No.A1/603/2021 dated 25.03.2022 informing that TDS amount and the interest thereon pending for the Thiruthangal Municipality was to the tune of Rs.1,27,42,010/-. The Bank had sent e-mail dated 23.03.2022 and the letter dated 28.03.2022. Thereafter, the Bank acted upon and debited the amount due from the account of the petitioner. The decision of the Bank is not an unilateral decision. They have only followed the statutory obligation as mandated by the law. Though the Municipality had returned the letters to the Bank, they have not informed about any legal impediment to debit the due amount. Hence, the bank debited the amount and credited the same to the 1st respondent. 9/12 https://www.mhc.tn.gov.in/judis https://www.mhc.tn.gov.in/judis

The primary contention of the petitioner is that the petitioner's dues is for the years from 2010-2011 to 2016-2017 for the TDS payment to the contractors and in the year 2021, the Thiruthangal Municipality was merged with the petitioner's Municipality. Hence, he cannot be countenanced once the Municipality takes over the other Municipality with all such liabilities. The TDS amount are deducted while settling the bills to the contractors. If there is any contradiction, it is for the Municipal Authority to recover from the contractors. For that they cannot deny to tax dues to be paid to the 1st respondent. If at all the petitioner is aggrieved with regard to the non-details of the particulars and for any other defence, the petitioner ought to have raised objections to the adjudicating authority by writing a letter. He cannot blame the Municipality and escape from the tax liabilities. The bankers had acted as per the direction of the 1st respondent by following the rules and nothing more. Further, the judgments relied on by the petitioner are not relevant to the facts and circumstances of the present case. 15.In view of the above, this Court finds no merit in the petitioner's contention. Considering the fact that the petitioner is only an arm of the executive Government, the penal interest and other aspects can be considered liberally by the appellate authority, namely the Deputy Commissioner. While approaching this Court directly, limitation is lapsed. Hence, this Court 10/12 https://www.mhc.tn.gov.in/judis https://www.mhc.tn.gov.in/judis condoning the delay directs the petitioner to file an appeal before the Deputy Commissioner within a period of 30 days from the date of receipt of a copy of this order. The Deputy Commissioner concerned shall entertain the appeal on its own merits and in accordance with law without raising any objections with regard to limitation. 16.With the aforesaid direction, this Writ Petition is dismissed. No costs. Consequently, connected miscellaneous petitions are closed.

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