1. The petitioner is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in trading of goods in the State of Uttar Pradesh. The petitioner applied for registration under Section 17 of the Uttar Pradesh Value Added Tax Act,2008 (hereinafter referred to as the Vat Act) as well as under the Central Sales Tax Act (hereinafter referred to as the Act) in the year 2011 indicating its principal place of business in the State of U.P. as “Cabin No.2, First Floor, G-15, Sector-3, Noida”. The petitioner also indicated in the application form that the other address of the petitioner is in Banglore in the State of Karnataka. On 05.12.2013, the petitioner applied for change of principal place of business from “Cabin No.2, First Floor, G-50, Sector-3, Noida” to “D-510-513, Buffer Godown Compound, Devi Mandir Road, Dasna, Ghaziabad-201001” and requested the registering authority to amend the registration certificate accordingly. The petitioner contends that while applying for change of place of business, the petitioner had indicated that they had shifted to the new place of business on 20.01.2013. According to the petitioner, no action was taken on the petitioner’s application inspite of a reminder being issued again on 11.02.2015.
2. The petitioner contends that in the year 2004 ex-parte assessment orders were passed by the assessing authority for the assessment year 2011-12, 2013-14 and 2014-15. According to the petitioner, no notice was served upon them, and that, on this ground, the appeals filed by the petitioner were allowed by orders dated 31.01.2015, 20.02.2015 and 30.05.2015. The assessment orders were set aside and the matter was remitted to the assessing authority to pass a fresh assessment order. The assessment proceedings for the aforesaid years is still pending consideration. The assessment orders were set aside on the ground that the petitioner had no notice of the assessment proceedings, inasmuch as their principal place of business had changed and that the summons were sent to the petitioner’s old place of business.
3. The petitioner contends that pursuant to the ex-parte assessment orders for the assessment years 2011-12, 2013-14 and 2014-15, attachment notices were issued which were never served and thereafter the bank accounts of the petitioner were seized and an amount of Rs.27,65,18,303/- was withdrawn, which was equivalent to the tax assessed under the ex-parte assessment order. The petitioner contends that even though the appeals have been allowed and the assessment orders have been set aside, the amount has not been refunded till date.
4. The petitioner received garnishee notices for recovery of Rs.49,82,01,250/-. The petitioner being aggrieved by the method in which huge sums of money were being withdrawn by the respondents in such cavalier fashion by making ex-parte orders without giving due notice filed the present Civil Misc. Writ Petition No. 80 of 2006 questioning the action of the respondents in attaching the petitioner’s bank account. The petitioner contends that before the matter could be heard by the Court the amount was withdrawn pursuant to the ex-parte assessment orders dated 15.12.2015. This Court, while entertaining the writ petition passed an order dated 02.02.2016 directing the petitioner to file an application for recall of the ex-parte assessment orders. Subsequently, writ petition no. 168 of 2016 was filed for the quashing of the ex-parte assessment orders dated 15.12.2015 passed under U.P.Vat Act and Central Sales Tax Act for the months of April to October, 2015 as well as the order dated 11.02.2016 by which the petitioner’s recall application was rejected. The petitioner in this writ petition also prayed for the quashing of the order dated 02.09.2014, by which their application for change of place of business was rejected.
Held by High Court
1. Before parting, we must observe the manner in which the respondents have proceeded with the assessment and recovered the amount from the petitioner’s Bank account in haste is deplorable and in gross violation of the provisions of the Act. We find that for the assessment years 2011-12, 2013-14 and 2014-15 ex-parte assessment orders were made without adequate service of notices upon the petitioner. These assessment proceedings were set aside in appeal on the short ground that the service of the summons were sent at the address where the petitioner was no longer carrying on its business. Inspite of this knowledge, the respondents chose deliberately to serve the notice for provisional assessment for the period April to October, 2015 upon the petitioner at the Noida address knowing fully well that the petitioner was not carrying any business from the Noida address. The respondents knew very well that the petitioner had shifted its place of business from Noida to Ghaziabad as they made a futile attempt to serve the notice at Ghaziabad but later for the reasons best known to them, chose deliberately to serve the notice by affixation at the Noida address. Such tactics adopted by the assessing authority in getting the service effected upon the petitioner was in gross violation of Rule 72 of the Rules.
2. We also find that the entire exercise of service was done within four days without taking recourse to the other mode of service, namely simultaneously service by registered post with acknowledgment due. The assessment order indicates that the first and last date of hearing of the assessment proceedings was 10.12.2015 and that the assessment order was passed on 15.12.2015. The counter affidavit reveals that the assessment order was served by attachment at the Noida address. This was done deliberately by the respondents so that the respondents could withdraw the amount through garnishee notices by exerting pressure upon the bank authorities. The Court gets an uncanny feeling that a deliberate attempt was made by the respondents to withdraw the money from the petitioner’s bank account through dubious mean by passing exparte assessment orders and not allowing it to be served validly upon the petitioner. If in this cavalier fashion the Commercial Tax Department functions and withdraws huge sums of money without valid service, it would be difficult for big business houses to carry on their business. Such business houses would be forced to shift their business outside the State of Uttar Pradesh.
3. Consequently, the petitioners are entitled for cost. The writ petitions are allowed with cost amounting to Rs. 2,00,000/- (Rupees two lakhs only), which will be paid by the Commercial Tax Department to the petitioner within two weeks from the date of filing of a certified copy of this order. If the amount is not paid, it would be open to the petitioner to move an appropriate application in this petition.
4. It would be open to the Commercial Tax Commissioner, Lucknow to institute an enquiry and fix responsibility on the erring officer for recovery of the said amount.