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, is challenging notices issued by the revenue authorities. An ex-parte assessment order dated 31.05.2022 was passed against the petitioner for the assessment year 2017-18 under the Chhattisgarh Value Added Tax Act, 2005, leading to a demand notice of Rs. 2,77,96,666/-. A revision petition against this order was dismissed on 27.03.2024. Subsequently, the petitioner filed an application under Section 49(7) of the Act. Before this application was considered, the petitioner was informed by the State Bank of India that a lien had been marked on three of its bank accounts for Rs. 2,44,46,981/-. This lien was based on notices dated 28.03.2024 issued by the Assistant Commissioner Commercial Tax under Section 29(1) of the Act. The petitioner contends that one of the bank accounts attached belongs to a different business entity, M/s Maa Kali Petrol Pump, and that the assessment proceedings were for a different firm.

Held

The Court observed that while the petitioner raised the plea of violation of principles of natural justice due to the ex-parte assessment order, the order dated 25.06.2024 passed by Respondent No. 1 (State of Chhattisgarh) on the petitioner's application under Section 49(7) of the Act, 2005, had already taken this into consideration. Respondent No. 1 found hardship to the petitioner and remitted the matter back to Respondent No. 2 for reconsideration under Section 49(1) of the Act, 2005. Therefore, the Court held that the petitioner has an alternative remedy. The petitioner can approach Respondent No. 2, present his case, and raise grievances regarding the lien on the bank accounts, including the one belonging to M/s Maa Kali Petrol Pump, before the concerned authority. Respondent No. 2 is directed to provide a proper opportunity of hearing and pass a fresh order within three weeks. The petitioner is at liberty to submit an additional reply. The Court did not quash the impugned notices directly but remanded the matter for fresh consideration.

Key Issues

1. Whether the notices dated 28.03.2024 issued by Respondent No. 4 under Section 29(1) of the Act, 2005, and the notice dated 31.05.2022 issued by Respondent No. 3 are liable to be quashed and set aside, considering they arise from an ex-parte assessment order passed in violation of principles of natural justice. The petitioner argued that the impugned notices, stemming from an ex-parte order passed without proper opportunity of hearing, are arbitrary and continue to be in operation despite the matter being remanded. The State contended that the petitioner has an alternative remedy before Respondent No. 2, as the matter has been remanded for fresh consideration, and the petitioner can raise all grievances, including the lien on bank accounts, before that authority. 2. Whether the lien marked on the bank accounts, including one belonging to a different business entity, is valid. The petitioner argued that the attachment of a bank account belonging to M/s Maa Kali Petrol Pump, a separate business, in proceedings related to M/s Raghunath Hardware, is incorrect. The State argued that the petitioner can raise this specific grievance before Respondent No. 2 during the fresh consideration.