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2019 (8) TMI 575

..... pellate authority, the amount of ₹ 1,49,27,723/should be refunded by the respondent no.1 with interest at the rate of 12% p.a. - HELD THAT:- The action on the part of the concerned authorities could be termed as absolutely highhanded and arbitrary. The facts of this case speak for themselves. In the course of the hearing of this matter, the Officer assisting the learned AGP went to the extent of even making a statement that the amount of ₹ 1,49,27,723/is not to be recovered from the writ-applicant. He conceded to the fact that while determining this amount, there is an error. He also conceded to the fact that amount of ₹ 75 lakh and odd out of ₹ 1,49,27,723/is only to be taxed - As on date also, the respondent no.1 is ready and willing to refund only an amount of ₹ 1,07,98,892/. It still wants to hold on to the entire amount Plus the amount deposited by the writapplicant towards 20% of the predeposit as ordered by the appellate authority. We were inclined to take a very strict view of the matter. This is not the way and the manner to recover tax. The department should not get so much desperate for the revenue. The revenue is to be collected in accordan .....

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..... quash the recovery notice annexed at AnnexureD of this application. (D) Be pleased to restrain the Respondents from taking any further steps with respect to the assets of the petitioner pending the adjudication of appeal filed by the petitioner before Respondent No.2 in terms of the stay order granted by the Respondent No.2 annexed at Annexure-J with this application. (E) Be pleased to pass such other and further orders, which may be deemed fit in the interest of justice. 2. The case of the writ-applicant in its own words as pleaded in the Writ-application is as under:- 2.1 That the petitioner herein, Micromax Informatics Limited is an Indian consumer electronics company, duly registered under the provisions of the Companies Act, 2013, with its local office at C/o. Neeta Enterprices, T3031, Tirupati Estate, Opp. Ekta Hotel, Aslali Bye Pass Aslali, Ahmedabad 382427. It has its corporate office at Plot No.288A, Near Audi Service Center, Phase-IV, Sector 18, Udyog Vihar, Gugaon - 122016, Haryana and is a registered dealer under the provisions of Gujarat Value Added Tax Act, 2003 (hereinafter, GVAT Act ) and is hence entitled to the fundamental rights and legal rights enshrined under .....

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..... iolation of natural justice, as it was issued without issuing a proper and detailed show cause notice prior to the assessment. Further, the assessment order is a nonspeaking order, inasmuch as it does not disclose the basis for excess demand in the order. It is most pertinent to mention that the impugned order discloses no basis whatsoever for demand raised therein. The petitioner filed the pending Appeal based on the information gathered from the annexures received with the impugned order and inquiries made. 2.8 From the documents annexed with the assessment order, it seems that the assessment has been done without accounting for adjustment in sales made in lieu of the goods which were returned by the purchasing dealers of the Appellant and tax benefit worth INR 7,858,080/has been disallowed on that account. Further some adjustment (INR 365,776) has been disallowed due undisclosed reasons. The petitioner has produced credit notes and corresponding debit notes as proof of the aforesaid sales return. 2.9 The Appeal alongwith the application was fixed for hearing on 29.01.2019. However, the petitioner's counsel was informed that due to some internal notification, all the matters .....

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..... 19. However, there was some confusion as to whether 20% of the interest amount was to be paid or not, as a copy of the direction dated 07.02.2019 was not provided to the Petitioner by Respondent No.2. The petitioner's counsel informed the factum of payment to Respondent No.2 vide a representation and obtained clarification regarding the rest of the amount. Upon obtaining clarification 12.02.2019, the petitioner paid the rest of the 20% amount i.e.₹ 13,40,777/on 14.02.2019. 2.15 That, in the meanwhile, to the utter shock of the petitioner, the Respondent No.1 coerced the Bank to release a demand draft to the tune of ₹ 1,49,27,723/[ One Crore Forty Nine Lakh Twenty Seven Thousand Seven Hundred and Twenty Three rupees], i.e.the entire disputed demand and encashed the same on 15.02.2019 vide DD No.ING150219007, without any advance notice to the petitioner. 2.16 That the petitioner's counsel brought this to the notice of Respondent No.2 who passed an order of stay on recovery operative until 31.05.2019 on 18.02.2019. The Respondent No.2 addressed this order to Respondent No.4 as well. 2.17 That the petitioner's counsel gave filed applications for refund of the am .....

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..... ondent no.1 coerced the bank to release a demand draft to the tune of ₹ 1,49,27,723/[ Rupees One Crore Forty Nine Lakh Twenty Seven Thousand Seven Hundred and Twenty Three only] i.e. the entire disputed amount and encashed the same on 15/02/2019 vide D.D. No.ING150219007 without any advance notice to the company. 8. The position, as on date, is that the respondent no.1 is holding an amount of ₹ 1,49,27,723/as well as the amount of ₹ 29,85,544/[ 20% predeposit]. 9. In such circumstances, the writ-applicant prays that as the amount of ₹ 29,85,544/has been deposited as ordered by the appellate authority, the amount of ₹ 1,49,27,723/should be refunded by the respondent no.1 with interest at the rate of 12% p.a. 10. Having heard the learned counsel appearing for the parties and having gone through the materials on record, we are of the view that the action on the part of the concerned authorities could be termed as absolutely highhanded and arbitrary. The facts of this case speak for themselves. In the course of the hearing of this matter, the Officer assisting the learned AGP went to the extent of even making a statement that the amount of ₹ 1,49,27, .....

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..... the petitioner is unnecessarily delaying the hearing of the stay application. However, in the absence of any exceptional circumstances, there is no warrant for the respondent authorities to proceed to initiate coercive recovery in exercise of powers under section 44 of the Act by attaching the bank accounts of the petitioner. In the opinion of this court, the conduct of the fourth respondent in attaching the bank accounts under section 44 of the Act in the facts and circumstances of the case was not warranted when the appeals preferred by the petitioner together with the stay applications were pending consideration before the first appellate authority. 14. The Second decision is of the Andhra Pradesh Court in the case of AnabeShahi Wines and Distilleries Private Limited Vs. Appellate Deputy Commissioner, Secunderabad Division, Nampally, Hyderaband 21 APSTJ 98 AND Katuri Medical College and Hospital Vs. Commercial Tax Officer & Others, 62 VST 185 (AP), wherein the Court observed as under:- The basis of the principle in AnabEShahi Wines case [1995] 98 STC 386 (AP); 21 APSTJ 98, is that if recoveries of disputed tax or penalty are made where stay application is pending before the .....

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