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TMI Blog2023 (3) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 20.02.2018 under Form V invoking the provisions of Revenue Recovery Act, 1864 (hereafter "the RR Act"), under Section 27 of the VAT Act. The revenue had issued assessment orders for the assessment years (AYs) 2005-06 to 2008-09, 2009-10 and 2010-11, under which Rs.1,88,81,000/-, Rs.2,38,84,000/- and Rs.2,21,83,854/- was claimed respectively, as tax due and payable. 3. The assessee argued, before the High Court that the revenue, despite several requests, did not furnish assessment orders, and that it was not aware of them. Since these orders were allegedly not served, the assessee submitted that it was unable to examine their correctness and whether they conformed with the provisions of the VAT Act, and further to enable it to avail remedies under the statute. The assessee alleged that the notice dated 03.02.2012 in Form V under the RR Act invoking Section 27 of the VAT Act for non-payment of arrears of tax to the tune of Rs.5,59,58,758/- and attaching its various properties, led it to bring to the notice of the authorities that the arrears so reflected in Form V were erroneous. The assessee requested to cancel the said demand, since the assessment orders for the year 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the court. As a result, the revenue issued proceedings dated 31.03.2011 confirming the demand of tax in a sum of Rs.1,86,80,708/- as arrived at by assessment order dated 07.07.2009. The revenue alleged that the said proceeding was served on one Mr. Pankaj Agarwal, Director of the company on 31.03.2011 itself, which was duly acknowledged. 6. The revenue further contended that similarly for AYs 2009-10 and 2010- 11, assessments under VAT Act were finalized raising a demand of Rs.2,38,84,812/- and Rs.1,21,83,884/-. Since the assessee did not pay the tax due in the normal course, an urgent notice dated 14.06.2011 was issued for payment of Rs.5,50,58,758/- which included the arrears of tax payable for the earlier period i.e., 2005-06 to 2008-09. It was claimed that this urgent notice was served on Mr. Neeraj Agarwal, one of the Directors of the assessee company on the same day. The arrears shown as due, were not paid, resulting in a demand notice in Form IV dated 12.09.2011 under the RR Act, before attaching the assessee's properties. Since there was no response, or compliance, an attachment order dated 03.02.2012 in Form V under the RR Act was issued. Even then the assessee did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen for the first time, submitted representation dated 18.06.2018 for furnishing certified copies of assessment orders. Similar representations renewing the said request are stated to have been made on 24.10.2018 and 05.03.2019. According to the revenue none of the said representations, claimed that the assessment orders passed by the revenue were not served and on the other hand it claimed that "the assessment orders are not available with us and our factory is closed long back and above orders are not traceable in our records". The revenue averred that the allegation of not furnishing of copies of assessment orders passed, was an after-thought, to thwart the proceeding initiated by the respondent for recovery of tax dues. Nonservice of assessment orders was not raised in the earlier two writ proceedings and this, it was contended by the revenue, demonstrated absence of bonafides. 9. The impugned order noticed that the VAT Act stipulates the manner and method of service of notices and orders on the assessee; Rule 64 of the Telangana VAT Rules "64. Mode of Service of orders and notices (1) Unless otherwise provided in the Act, or these Rules, a notice or other document required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-11 are concerned, the revenue's contention with respect to the admission by the assessee in its pleadings in the previous writ petition was rejected: "the said contention urged does not hold water, since the challenge in the said Writ Petition filed by the respondent as petitioner was in relation to a notification issued by the petitioner's banker bringing to auction the properties of the petitioner for recovery of loans advanced to it wherein the respondent, as petitioner, sought to claim priority over such assets being a crown debt. The dispute in the said Writ Petition is primarily between the respondent as petitioner and the bank. Thus, the claim of the respondent in the counter affidavit that the petitioner herein did not choose to file a counter affidavit therein raising the said plea would not preclude the petitioner from taking the said plea in the present proceeding." Paragraph 32 of impugned High Court judgment 11. The impugned order also held that the revenue did not have record evidencing the service of assessment order on the assessee for AY 2009-10 and 2010-11 by any of the modes prescribed under Rule 64(1)(b). It was noted that Section 42 of the VAT Act mandat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not served with orders, could not be entertained; even otherwise, that was not the subject matter of its representations. Having regard to all these factors, the assessee was estopped from contending that the attachment orders were vitiated in law. 14. Counsel for the assessee relied on the findings of the High Court, and stated that the revenue's arguments are meritless, with respect to service of assessment orders. It was submitted that Rule 64, relied on by the High Court is unambiguous, as every assessee has a right to expect service of assessment orders upon it, to enable it to seek appellate or revisional remedies. Even otherwise the correctness of assessment orders and their compliance with law, required service of orders, in terms of the two enactments. Without resorting to the precondition of such notice, the revenue could not have sought recourse to the RR Act and attached the assessee's properties. Therefore, the findings in the impugned order were justified and in accordance with law. Analysis and conclusions 15. The High Court's reasoning is based entirely on the effect of Rule 64 of the rules. There can be no doubt that when any statutory or administrative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal and affirmed by the High Court, we do not consider it necessary to examine the question though vehemently argued by Dr Rajeev Dhavan, learned Senior Counsel for the appellants, namely, whether in a given case service of the order on the appellants' lawyer is proper or not and whether the service on the appellants' minor daughter was in accordance with the procedure prescribed under Section 22 of SAFEMA or not. 17. If the appellants had the knowledge of the order passed against them and which they admit to have as per their own admission mentioned above, pursuant to which they filed appeals, then in our opinion, so-called irregularity in the manner of effecting the service of the order on them, etc. was of no consequence and cannot be termed as illegal per se (if found to exist though denied by the Revenue)." In Sri Budhia Swain & Ors. v. Gopinath Deb & Ors. [1999] 2 SCR 1189: (1999) 4 SCC 396 similarly, the court observed as follows: "As already noted the appellants sought for review or recall of the order from the O.E.A. Collector solely by alleging that the notice which was required to be published in the locality before settling the land in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be given primacy as revenue dues, over and above the bank's dues. The assessee was served in those writ proceedings; however, it did not dispute the revenue's contention. This, in the opinion of the court is a telling aspect, as it highlights the assessee's conduct in deliberately choosing to keep quiet, even when it could have raised a grievance. 19. Moreover, the assessee also did not dispute that it had not received the copies of assessment orders, in those writ proceedings. Further, it did not seek copies of the assessment orders, in the representations addressed to the revenue after the second attachment order was issued, on 20.02.2018. In these circumstances, the assessee's contentions that the attachment orders were unenforceable, because the assessment orders were not served on it, are untenable. The High Court, with due respect, fell into error, in holding that since the subject matter of the revenue's writ petition (W.P. No. 25943/2011) was different, the assessee could not be faulted for highlighting that it had not received a copy of the assessment order. In fact, the entire premise of that writ petition was that the assessee owed tax dues, to the extent of Rs.5,59,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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