TMI Blog2015 (7) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuant to Demand notices respondent has issued notices dated 28.03.2015 and 30.03.2015, Annexures-J and K respectively under Section 45 of the Act to debtors of petitioner and same being held bad in law and as such they require to be quashed by reserving liberty to the respondent to issue fresh notices in the event of petitioner application for rectification Annexures - M and N being rejected. Respondent shall dispose of the applications dated 13.04.2015 Annexure-M and N filed by the petitioner expeditiously at any rate within 15 days from the date of hearing which is fixed at 12.05.2015 at 11.00 A.M. without waiting for any further notice. - Decided partly in favor of assessee. - WRIT PETITION NOS. 16563 AND 18614-18634 OF 2015 - - - Dated:- 28-4-2015 - ARAVIND KUMAR, J. For The Petitioner : K.G. Kamath For The Respondent : T.K. Vedamurthy, HCGP ORDER 1. Petitioner is a sole proprietary concern engaged in the works contract mainly for Government of Karnataka and its social wings and is registered as a dealer under the Karnataka Value Added Tax Act, 2003 (for short the 'Act'). For the Assessment Years 2008-09 and 2009-10, reassessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings, respondent has proceeded to pass reassessment orders which are in violation of principles of natural justice and demand notices have been served on petitioner on 10.04.2015 for the assessment year 2008-09 and on 09.04.2015 for the assessment year 2009-10 which would clearly indicate that within 30 days petitioner was required to pay the amount demanded under these notices and contends before lapse of said 30 days period petitioner cannot be treated as a defaulter and only after lapse of 30 days namely after 08.05.2015 and 09.05.2015 respectively and as such, initiation of recovery proceedings for recovery of tax by issuance of notices to debtors under Section 45 of the Act on 28.03.2015 vide Annexures - J and K is illegal. It is also contended such act of respondent violates Section 53 of the Act, inasmuch as, said provision enables the petitioner to seek for payment of tax in installments even if it is admitted to be due and payable and as such recovery proceedings is bad in law. 5. Per contra, Sri. T.K. Vedamurthy, learned HCGP appearing for respondent/State would contend that on account of reassessment orders passed on 28.02.2015 not being able to be served ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered address to serve reassessment orders on petitioner. However, mahazar said to have been drawn at spot would indicate that Group 'D' Official had visited the petitioner's Officer namely registered office on 28.02.2015 at about 3.00 p.m. Said Official is said to have affixed the orders of reassessment on the building of registered office of petitioner. 7. Service of notice to a dealer under the Karnataka Value Added Tax can be effected by authorities under the mode prescribed under Rule 176 and said Rule reads as under: 176. Service of Notices, etc. - The service on a dealer of any notice, summons or order under the Act or these rules may be effected in any of the following ways, namely - (1) by giving or tendering it to such dealer or his manager or agent; or (2) if such dealer or his manager or agent is not found, by leaving it at his last known place of business or residence or by giving or tendering it to some adult member of his family; or (3) if the address of such dealer is known to the prescribed authority by sending it to him by registered post; or (4) if none of the modes aforesaid is practicable, by affixing it in some conspicuous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken effective steps to effectively serve reassessment orders on petitioner. 11. Prescribed Authority in order to recover tax, penalty or any other amount duet to State may resort to recovery of such tax or penalty as provided under Section 45 of the Act by calling upon such persons from whom money is due or may become due and payable to the dealer or any person who holds or may subsequently hold such money for or on account of dealer, to pay to the prescribed Authority such money held by it/them. On order of re-assessment being passed and consequential demand being raised pursuant to such order prescribed Authority would be entitled to recover such tax, interest and penalty and other amounts due to State by resorting to section 42 of the Act. In the instant case respondent has invoked Section 42(9) of the Act by issuing notice dated 28.02.2015, Annexures - G H and has called upon petitioner to pay the said amount within 30 days from the date of service of notice. A bare perusal of said notices would indicate that petitioner is required to pay tax, interest and penalty demanded thereunder is paid within 30 days of `service of this notice'. Thus, the words `service of noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect service of re-assessment orders dated 28.02.2015, Annexures - D and E along with demand notices on petitioner. However, for reasons best known Rule 176 of the Karnataka Value Added Tax Rules, has not been adhered to as already discussed hereinabove. However, it is also made clear at this stage itself that it would not be incumbent upon the respondent authorities to resort to effect service of notice in seriatum as prescribed under Sub-Rule (1) to (4) and as indicated therein, it can be effected in any one of the modes prescribed thereunder. 15. Now turning my attention back to facts in hand it would indicate that order of assessment as well as consequential demand notices have been served on the petitioner only on 09.04.2015, petitioner had a statutory right to file an appeal against said order as provided under section 62 of the Act or in the alternate had a right to deposit the tax within 30 days from date of service of notice as indicated in the demand notices or could have sought for payment in installments. The right of the petitioner to deposit such tax demanded would be available till the end of 30th day. Records would indicate demand notices were served on petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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