M/S Raghunath Hardware vs. State Of Chhattisgarh

Facts

The petitioner, M/s Raghunath Hardware, a proprietorship firm engaged in retail business and operating a fuel station, challenged two notices. The first, dated 31.05.2022, issued by Respondent No. 3, demanded Rs. 16,50,315/- towards Entry Tax arrears based on an ex-parte assessment order for the assessment year 2017-18 under the Entry Tax Act, 1976. The petitioner's revision petition against this order was dismissed by Respondent No. 2 on 27.03.2024. Subsequently, on 28.03.2024, Respondent No. 4 issued two notices under Section 29(1) of the Act of 2005, directing Respondent No. 5 (State Bank of India) to pay Rs. 2,44,46,981/- towards tax arrears. The petitioner contended that one of the bank accounts targeted belonged to a different business entity, M/s Maa Kali Petrol Pump. An application under Section 49(7) of the Act, 2005, was filed by the petitioner, and the matter was later remanded by Respondent No. 1 to Respondent No. 2 for fresh consideration.

Held

The Court held that the petitioner has an alternative remedy and that the writ petition is not maintainable at this stage. While acknowledging the petitioner's plea of violation of natural justice regarding the ex-parte assessment orders, the Court noted that Respondent No. 1, in its order dated 25.06.2024, had considered the petitioner's application and remanded the matter back to Respondent No. 2 for fresh consideration under Section 49(1) of the Act, 2005. The Court found that the petitioner's grievance regarding the hardship and the disowning of exemption claims without proper reasons were taken into account during the remand. Therefore, the petitioner has a clear remedy to approach Respondent No. 2, present his case, including the grievance of the lien over the bank accounts, and seek a fresh decision in accordance with the law. The Court directed Respondent No. 2 to pass an order afresh within three weeks after providing a proper opportunity of hearing to the petitioner and considering any reply submitted. The petitioner was granted liberty to submit an additional reply. The writ petition was disposed of with these observations.

Key Issues

1. Whether the notices dated 28.03.2024 issued by Respondent No. 4 and the notice dated 31.05.2022 issued by Respondent No. 3 are arbitrary and liable to be quashed, particularly in light of the ex-parte assessment order dated 31.05.2022, which the petitioner claims was passed in violation of natural justice principles? (Section 29(1) of the Act of 2005 and principles of natural justice). Petitioner's arguments: The impugned notices dated 28.03.2024 and 31.05.2022 are arbitrary and should be quashed. The ex-parte assessment order of 31.05.2022, from which these notices arise, is bad in law as it was passed without affording a proper opportunity of hearing, violating natural justice. The remand order by Respondent No. 1 did not set aside these notices, allowing them to remain in operation. Revenue/State's arguments: The present writ petition is liable to be dismissed because Respondent No. 1 has already remanded the matter back to Respondent No. 2 for fresh consideration. The petitioner has an opportunity to present his case before Respondent No. 2 and can raise grievances regarding the lien on bank accounts, including clarifying that one account belongs to a different entity, and can pray for the release of the accounts.