M/S. V. Kiran Industries v. Commercial Tax Officer-Iii

HIGH COURT FOR THE STATE OF TELANGANA (Special Original Jurisdiction) WEDNESDAY ,THE THIRTIETH DAY OF DECEIVBER , TWO THOUSAND AND TWENTY PRESENT THE HONOURABLE SRIJUSTCE M.S.RAMAGHANDRA RAO AND THE HONOURABLE SRI JUSTICE T.AMARNATH GOUD WRIT PET|T|ON NO: 22961 OF 2020 Between:

[,4/s. V. Kiran lndustries, Rep. by its Proprietor, Iti]r. Vadnala Ravi, 6-2i-24i213, Null, Shradhanand Gunj, Nizamabad-503 001 .,.PETITIONER AND

1. Commercial Tax Officer-ll, Nizamabad 2 S_!{e of Telangana, Rep. by its Principal Secretary to Government, Revenue (CT-ll) Department, Secretariat, Hyderabad

3. The Bank lVanager, Axis Bank, Hyderabad Road, Nizamabad. ...RESPONDENTS Petition under Artjcle 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ of Certiorari or any other appropriate writ or order or direction - (a)quashing the impugned assessment order in AO No.34145, dated 23l3t2O2O passed by the '1st Respondent in the name of Vadnala Ravi, the proprietor, instead of passing it in the name of the Petitioner M/s V. Kiran lndustries, Nizamabad as illegal, arbitrary in violation of principles of natural justice, in violation of Rule 64 of the Telangana VAT Rules for the assessment year 2015-16 under the Central Sales Tax Act, '1956. and (b)quash the garnishee notice under Section 29 of the Telangana VAT Act, dated 2511112020 issued by 1st Respondent to the 3rd Respondent as illegal, arbitrary and contrary to the assessment order itself.

lA NO: 'f OF 2020 Petjtion under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pieased to grant suspension of the garnishee notice, dated 25.1 1 .2020 issued by the 1st Respondent to the 3rd Respondent, pending disposal of the Writ Petition, as otherwise the Petitioner will be put to severe loss and hardship, Counsel for the Petitioner:SRl.P. KARTHIK RAMANA Counsel for the Respondent Nos. 1 & 2: SRl. M. GOVIND REDDY, SPECIAL COUNSEL FOR CT Counsel for the Respondent No. 3: -- The Court made the following:

HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO AND HONOURABLE SRI JUSTICE T.AMARNATH GOUD WRIT PETITION NO.22961 OF 2O2O ORDER:

(Per Sri Justice M.S.Ramachandra Rao) In this Writ Petition, the petitioner assails the Assessment Order A.O.No.34l45 dr.23.03.2020 passed by the l" respondent lbr the period 2015-16 under the CST Act. 1956.

2.

The petitioner is a Proprietary concern which is registered as a VAT dealer on the rolls of the 1'' respondent under TVA'I'Act,2005" However a shorv-cause notice was issued to the petitioner's Proprietor on 07.06.2019 by the l't respondent, that too by e-mail, which is not a proper mode of service of notice nnder Rule 64 of the TVAT Rules. 3.

According tc the petitioner, it filed online response on 16.03.2020 submitting C Forms, but thereafter the petitioner did not hear anything from the 1't respondent; surprisingly, the petitioner's banker, i.e., the 3'd respondent was served a notice under Section 29 of the TVAT Act, 2005 lor recovery of a sum of Rs.32,07,468/- on 25.11.2020: rhat the petitioner then verified with the 1" respondent and was informed that the demand pertains to the impugned Assessment Order dt.23 .03 .2020, 4, Learned counsel for the petitioner contends that the petitioner applied for the said order, but the 1't respondent claimed that the order had been dispatchecl to the petitioner on 10.06.2020 itsell but it was -hever served on the petitioner.

5.

The petitioner contends that the inpugned older is passed in the name of its Proprietor, while the business entity which should have been assessed is the petitioner by name Mis. V. Kiran Industlies, Nizarnabad, and that the returns had also been filed in the said name; and therefore, the Assessment Order could not have been passed in the natne of an incorect taxable entity, according to the petitioner. 6.

Learned counsel for the petitioner contends that the 1't respondent has not considered the C Forms submitted by the petitioner on 16.03.2020; and though the order refers to a personal hearing in which the petitioner is alleged to have been participated on 16.03.2020. the petitioner had not parlicipated in the personal hearing because thc datc of personal hearing was not comrnunicated to it. 1.

The petitioner contends that the 1't respondent did not care to give credit to the tax paid by the petitioner and the issuance of garnisl.ree notice by the 1'r respondent without even serving the Assesstnent Order cannot be sustained 8.

Sri M.Govind Reddy, learned Special Counsel for Commercial Taxes appearing for the respondents admits that the dealer in question who is to be assessed is the petitioner and not the Proprietor of the petitioner, and that the impugned order has been passed against an incorect taxable entity. He also could not explain why tl.re reply dt.16.03.2020 filed by the petitioner along with C Fonns was also not considered by the l'1 respondent. He did not deny that personal hearing was also not provided to the petitioner.

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On account of these circumstances, we are satisfied that the impugned order is vitiated and cannot be sustained'

10. Accordingly, the Writ Petition is allowed; the impugned Assessment Order A'O.No.34145 dt'23'03'2020 passed by the 1't respondent and also the garnishee notice dt'25'11'2020 issued by the 1'l respondent to the 3'd respondent are both set aside; the matter is remitted back to the 1" respondent for fresh consideration; the itt respondent is directed to serve a show-cause notice on the petitioner indicating the tumover proposed to be taxed and the tax proposed to be levied thereon in accordance with Rule 64(1Xb) of the TVAT Rules' 2005; the petitioner is permitted to file objections thereto within six (6) weeks from the date of receipt of the said show-cause notice aiong with supporting material; a personal hearing shall be afforCed to the petitioner by the 1't respondent; and then a reasoned order shall be passed by the 1't respondent in accordance with law and communicated to the petitioner' No costs"

11.

Pending miscellaneous petitions, if any, in this Writ Petition shall stand closed.

AVA SD/.B.SATY ASSISTANT REG AR //TRUE COPY// SECTION OFFICER \ \ s a e .

To, I uTt*I6*t*uq**u,t*.s",tffir*-en PM v U

HIGH COURT DATED:3011212020 TA s e o,J 0 6 JAN 2021 a!

ORDER

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WP.No.22961 ot 2020 Allowing the WP Without costs.

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