Case Law Details
Ajay Kumar Kaushal Vs State of Maharashtra (Bombay High Court)
Introduction: In a recent case before the Bombay High Court, Ajay Kumar Kaushal, a retired Director of M/s Ananta Impex Pvt. Ltd., challenged a notice issued by the Sales Tax Officer, Nodal Division Mumbai-2, under Section 38 of the Maharashtra Value Added Tax Act, 2002 (MVAT Act). The notice, dated 11th April 2022, sought the recovery of dues amounting to Rs.1,68,22,661, arising from assessment orders under the MVAT Act for the financial years 2016-17 and 2017-18.
Factual Background: The petitioner and two other founder directors had resigned from their positions with effect from 20th March 2017. They sold their shares to new incoming directors, who subsequently filed accurate Profit & Loss A/c, Balance Sheets, and returns, including an Audit Report, under MVAT and Income Tax Act. These submissions correctly reflected a NIL turnover of sales and purchases. However, after a few months, the new directors revised the MVAT Act returns, indicating a significant turnover.
The assessment orders were based on these revised returns, confirming the output tax and disallowing Input Tax Credit (ITC). While the petitioner did not challenge the assessment orders, he filed a Writ Petition seeking the quashing of the notice dated 11th April 2022 and the freezing of his Demat accounts.
Bombay High Court’s Observations:
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