Case Law Details

Case Name : Edelweiss Commodities Services Ltd Vs Commercial Tax Officer & Ors. (Madras High Court)
Appeal Number : W.P.15902 of 2015, M.P.No. 1 of 2015
Date of Judgement/Order : 5/6/2015
Related Assessment Year :

CA K. Jitendra Babu

In another case of recovery of disputed dues by the Commercial Taxes department, by attaching the bank account of the assessee, during  pendency of revision petition, the Hon ‘ble Madras High Court has directed the revision authority to dispose of the revision petition along with stay application within four weeks and kept the recovery in abeyance. This is in the recent case of Edelweiss Commodities Services Ltd. Vs. Commercial Tax Officer, Chennai [2015-TIOL-1501-HC-MAD-VAT].

It has become customary for the commercial taxes department in various States to send attachment notices to the banks, for recovery of the disputed dues, even though the appeals and stay petitions filed by the assessees are pending before the appellate authorities. They are resorting to unlawful coercive action, ignoring the number of judgements of various High Courts that recovery proceedings cannot be invoked unless and until the stay petition is decided by the 1st appellate authority atleast.

Time for Taxes

By the time the assessee approaches the High Court and gets interim relief, in some of the cases partial/full amount of disputed demand is being paid by the Bank to the Commercial Taxes Department, thereby leaving the assessee without any statutory remedy. The appeal proceedings will take years together and even if assessee wins in appeal, again it will be herculean task to get refund of amount recovered already. We can find umpteen number of cases of this – where  disputed taxes are recovered by attaching bank accounts of assessees – particularly in the State of Bihar on regular basis to meet the revenue targets, which is evident from the orders on the website of High Court, Patna.

It is high time that High Courts should direct the State Governments  for issue of Circular in this matter to avoid agony to the trade and industry, rather than granting relief to individual assessees who approach the Court.

(Author may be contacted

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