Allowed

M/s. Sri Raghavendra Constructions v. The State of Telangana and 3 others

Telangana HC10 Jun 2022WP/11006/2022

Case brief

AI extract

What is this about?

This common order quashes urgent payment notices and garnishee orders despite an alleged regular assessment. The High Court held that once a dealer opts for the composition scheme and pays tax accordingly, the department cannot initiate regular assessment to levy tax at a higher rate. The statutory contract under the composition scheme binds both parties.

What did the court decide?

The impugned urgent payment notice dated 20.07.2019 and consequential garnishee notices dated 24.02.2022 are set aside and quashed. Both writ petitions allowed without costs.

M/s. Sri Raghavendra Constructions Vs The… — Pension and Retirement Benefits | Telangana HC (2022)

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HIGH COURT FOR THE STATE OF TELANGANA: AT HYDERABAD (Special Original Jurisdiction)

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FRIDAY, THE TENTH DAY OF JUNE TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HON'BLE SRI JUSTICE UJJAL BHUYAN AND THE HON'BLE MRS JUSTICE SUREPALLI NANDA WRIT PETITION Nos. 27866 OF 2021 & 11006 0F 2022

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WP No.27866 ol 2021

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Between:

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It4/s. Sri Raghavendra Constructions, D.No. 1/55, Jameelapet Village, BB Nagar lt4andal, Nalgonda District, Telangana Represented by its Ivlanaging Partner, V. Ravinder Reddy S/o. V.Kishan Reddy, Age 45^years.

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..,PETITIONER

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AND

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'1 . The State of Telangana, represented by its Principal Secretary, Revenue (Commercial Tax) Department, Secretariat Buiidings, f Yderabad.

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The Commercial Tax Officer, Bhongir Circle, Bhongir,^Telangana

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The Assistant Commissioner^(LTU), Nalgonda^{Division, Nalgonda, Telangana.}

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...RESPONDENTS

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Petition under Article 226 ol the Constitution of lndia^{prayingthat in the} circumstances stated in the affidavit filed therewith, the^{High Courtmay be} pleased to issue Writ of l/andamus or any other appropriate writ or order or direction declaring the action of 2nd respondent in^passing the^impugned payment notice dated 2010712019 by the 2nd respondent as being illegal, arbitrary and in violation of principles of naturaljustice and^{for non compliance of} Rule 64 of Telangana VAT Rules, 2005, consequently set-aside^{the same.}

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lA NO: 1 OF 2021

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Petition under Section 151 CPC^praying that in the^{circumstancesstated} in the affidavit filed in support of the^petition, the High Court^{may be pleasedto} grant stay of impugned payment notice dated 20.07.2019^passed by the 2nd respondent for the assessment^{years 201 4-201 5, 2O15-201 6, 2016-2017under} the Telangana VAT Act, 2005,^pending disposal of the^{Writ petition as otherwise} the petitioner would put to severe loss,^{pending disposal} of^{the mainWrit} Petition.

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Counsel for the Petitioner: SRI D.SRINIVAS^{Sr.Counselfor}

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M/s. PILLIX LAW FIRM

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Counsel for the Respondents: SRI K.RAJI^{REDDY, Sr.Counsel}

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WP NO: 11006 OF 2022

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Between:

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Ir//s. Sri Raghavendra Constructions, D.No.^'1155, Jameelapet Village, BB Nagar N/andal, Nalgonda District, Telangana Represented by its Managing Partner, V. Ravinder Reddy Sip. V. Kishan Reddy, Age 45 years.

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...PETITIONER

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AND

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The State of Telangana, Represented by its Principal Secretary, Revenue (Commercial Tax) Department, Secretariat Buildings, Hyderabad.

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2- The Commercial Tax Officer, Bhongir Circle, Bhongir, Telangana.

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The Assistant Commissioner (LTU) (CT) Nalgonda Division, Telangana.

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The Canara Bank, l\rlalakpet Branch, Rep.bv.its Chief lVanger, D.No.1$-2705117 and'18, Ir/umtaj College Road, Malakpet, Hyderabad.

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.,.RESPONDENTS

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Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue Writ of Mandamus or any other appropriate writ or order or direction declaring the action of 2nd respondent in passing the impugned Demand for payment of amount outstanding of VAT dealer from the bank/ Third Party dated 24.02.2022 as being illegal, arbitrary and in violation of principles of natural justice and for non compliance of Rule 64 of Telangana VAT Rules, 2005, consequently seta-side the same.

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lA NO: 1 OF 2022

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of impugned Demand for payment of amount outstanding of VAT dealer from the bank/ Third Party dated 24.02.2022 passed by the 2nd respondent, pending disposal of the Writ petition as otherwise the petitioner would put to severe loss and hardship.

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Counsel for the Petitioner: SRI D.SRINIVAS, Sr.Counsel for M/s. PILLIX LAW FIRM

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Counsel for the Respondent Nos.1 to 3: SRI K.RAJI REDDY, Sr. Counsel

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Counsel for the Respondent No.4: None Appeared

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The Court made the following:

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THE HON'BLE SRI JUSTICE UJJAL BHUYAN And THE HON'BLE MRS.JUSTICE SUREPALLI NANDA

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WRIT PETITION Nos.278 66 of2O2L & 11006 of2022 COMMON ORDER:

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(Per Hon'ble Sri Justice Ujjal Bhuyan)

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This order will dispose ol both W.p.Nos.27g66 of 2O2l and llOO6 of 2022.

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2 We have heard Mr. D.Srinivas, learned senior counsel on behalf ol M/s. Pillix Law Firm for thc pctitioner and Mr. K.Raji Reddy, learned senior standing counsel, Commcrcial Taxes, lor the respondent.

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3 In W.P.No.27B66 of 2021, the praycr madc is to declare the action of the second respondent i.e. Commercial Tax Officer, Bhongir Circle, Bhongir, in issuing the urgent payment notice dated 2OO7.2olg as illegal and consequently to set aside the same.

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4 Petitioner in W.P.No.l 1006 of 2022 seeks a declaration that action of the sccond rcspondent in issuing garnishee notices dated 24.O2.2022 to the lourth respondcnt i.e . Canara Bank, Malakpet Branch, Malakpet, I{yderabad ancl to othcrs as illegal and consequentll,to set asidc the samc.

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5 According to the petitioncr it is a spccial class civil contractor registered with the (iovernment of Telangana. It is carrying on the

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business of^{execution of civil work relating to construction of roads} etc. Petitioner^{is a registered dealer with respondent No'2 underthe} Telangana^{Value Added Tax Act, 2OO5(TVATAct) as well as under the} Goods and^{ServicesTa-x (GST)'}

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6 It is stated that^{for the assessmentperiods from the year 2014} tili the^{year 2OI7, petitioner had filed monthly returns in Form VAT} 200bydulyattachingFormVAT50lalongwithcertificationoftax collection at source.^{It isstated that petitionerhad opted for} composition of^{tax and thereforefiled applicationsunder Form VAT} 250onmonthlybasiscoveringtheaforesaidassessmentperiodsalong with the returns filed under^{Form VAT 200'}

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7 According to^{the petitioneritwas surprised when itreceived} notice dated^{2O.O7 -2olg. It was an urgentpaymentnotice issued by} respondent No.2.^{Respondent No.2 statedthat assessments underthe} VAT Act was conducted^{by the Assistant Commissioner(CT) LTU'} Nalgonda Division,^{Nalgonda as per assessmentorder Nos'35305'} 35309 and^{353 10, all dated O2.O7.2019, followingwhich atotal} amount of Rs.6,52,46,001-00^{was outstanding against the petitioner'} Petitionerwascalledupontomakethepaymentwithinsevendaysof receipt of the said^{notice. The urgent payment noticedated} 20.O7.2019 reads^{as under:}

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GOVERNMENT OF^TELANGANA COMMERCIAL TAXES^DEPARTMEN"T

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TrN.36122086628

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Office of rhe Commercial Tax Officer, Bhongir Circle, Bhongir.

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Dated: 20.07.2019

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URGENT PAYMENT NOT]CE

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Pleasc take notice that according to this office records the vAT assessment was conducted by-Assistant Commissioner (CT), LTU, Nalgonda Division, Nalgaonda as per A.O. No.353OS, 35309, 35310, dated 02.O7.2O19 followrng the arrears are oursta;ding agai;st you.

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Sl.No	PERIOD	VAT AUDIT TAX	TOTAL
I	2014-15	Rs.1,40,16,511-O0	Rs.1,40,16,5t1-00
2	2015-t6	Rs.3,18,28,9 19-00	Rs.3,t8,28,919-OO
3	20t6-t7	Rs.I,94,00,571-00	Rs.1,94,00,571-00
	Totai		Rs.6,52,46,001O0

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Therefore, you are direcred ro pay the same within (7) days from rhe dare of receipt of this norice. If the arrears have alreadv bcen paid, please furnish ihe documentary evidence failing which the arrears will be recovercd under Revenuc Recovcry Act as if were in a.rear of rani revenue' besides, this action will be initiated for imposition oI penal interest under section 16 (3) oi APGST Act 1957 and Section 22 (2) of TGVAT Act 2005.

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sd/COMMERCIAL TA,\ OFFICER BHONGIR CIRCLE, BHONCIR

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8 It is stated that upon receipt of the said notice, petitioner had approached respondent No.2 with necessary documents evidencing payment of tax for the said period. petitioner contended that it did not receive pre-assessment notices as contemplated under Rule 64 of the Telangana Value Added Tax Rules, 2005 (TVAT Rules). Even the assessment orders were not served upon the petitioner. Besides, it is contended that during the entire assessment period from the year 2014 to 201 7 petitioner had undertaken only Government contracts for which VAT was deducted at source and Form vAT 509 was issued. Besides the entire turnover was under the composition scheme for r,vhich petitioner filed Form 250 for each work separately. Therefore,

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the entire turnover^{of the petitionerfor the assessmentperiod 20 14-} 2Ol7 was^{assessedand tax was paid at the source itself'}

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gltisundersuchcircumstancesthatpetitionerfiled W.P.No.27866 ot^{2O2lchallengingthe legality and validity of the} urgent payment^{notice dated 20 'O7 '2olg issued by respondent No 2} for the assessment^{period 2014 - 2017'}

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10 While the^{aforesaid writ petition was pending before this Court'} respondent^{No.2 issued arrear notice dated 14'O2'2O22 which vt'as} followed by the^{garnishee noticesdated 24'02'2022The garnishee} notices were issued^{to respondentNo'4 as well as to the Branch} Manager of Canara^{Bank, Malakpet, Hyderabad'lt was mentioned} 1n arrears of^{Rs.6,56,52,2I3-OOto the} therein that Petitioner^{ras Commercial Tax^{Department,Governmentof Telangana'Therefore'} under Section^{29 of the TVATAct, the bankers were requestedto} enforce payment /^{debit fees from the accounts of the petitioner} maintained with the^bankers.

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llGarnisheenoticesdated24.02.2022havebeenimpugned 1n W.P.No.llOO6 of^2022.

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72 A common counter^{affidavithas been filed by respondent No 2} covering both^{the writ} Petitions.

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13 In paragraph No.3 of the counter affidavit it is stated that petitioner is a dealer engaged in the business of works contract. It is registered with respondent No.2 both under the TVAT Act and under GST. It is stated that for the assessment periods 2014_15,2015_16 and 2016-17, petitioner had opted to pay tax at the rate of 5zo under composition scheme by filing applications in Form vAT 250 for all the works and accordingly filed monthly returns in Form VAT 2OO regularly in the office of respondent No.2 disclosing the following sale turnover:

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Sl.No.	Assessment period	Turnoverasper monthlyreturnsin formVAT2OORs. l	Taxliability Rs,	Turnoveras showninthe statutory formsRs.
I	2014-15	145,536,320	72,76,A16	3,01,66,235
2	2015-16	335,041,760	1,67,52,088	3,90,76,067
3	2016-17	177,r95,360	88,59,768	3,62,86,668

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14 On the strength of the authorisation issued by the Deputy Commlssioner (CT), Nalgonda Division, Nalgonda, third respondent initiated the audit of the books of accounts of the petitioner covering the above assessment period in order to ensure that the returns filed by the petitioner are complete and correct. In this connection notice dated 1 1.05.2017 was issued to the petitioner for production of books o€ of accounts for the aforesaid period. The notice was dispatched by way

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of registered^{post with acknowledgment due to the business address of} the petitioner.^{But no reply was received' Consequently'there was no} production of^{booksof accountsby the petitioner for scrutin'yby the} third resPondent

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15 As the^{petltionerdid not producethe books of accountsdespite} notice, third^{respondent proposed assessmentfora1l the three} assessment^{years to the best of his judgment.Accordingly, third} respondent issued^{show cause noticeson 20 'O2'2O 18 proposingto} levy tax at the rate^{of l4.5oh.The show causenotices indicated the}

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foliowing:

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no. I n.r..",,.,,, L Total rlrrno\cr 'la.ble Rs r"* al l:r P.r^r,r"5rf; 'lax Adjustmentof ta-x Ilalance o['lax L
I ", Contl acl P:ud payablc i
lls
iiPer'dl
Rs.
3 .t 5 b 3 9
lzl
1 20 79,08,621 .. ,23 ,7 2 ,6..6 14,55,36,I74 2.11,02.715 0 70.86.23.r i,40.16,511
I 20r1-rs
,2 2015-r6 47,a6,30,607 I4,35,a9,I82 .1,85,81,007 (l t,07,52,0li8 3. r a.2 8,9 19
| :: so..t,,.r:t
3 20t6-17 25,3r,35,(175 7.59,40,793 I7.7I,95, I63 2 56 93 302 r:l 62 02 7lt r.94 00.571

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16Theaboveshowcausenoticesweresenttothebusinessaddress of the petitioner^{by way of registered post with acknowledgementdue} on 20 .O2.2O 18^{itself a,fter obtaining authorisationfrom the Deputy} Commissioner^{(CT), Nalgonda.}

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1,7 Against the above show cause notices petitioner did not file any reply. Consequentlv, third respondent passed best judgment assessment orders on 02.07.2O l8 lor the three vears t.e. 20t4-15, 20 I 5- 16 and 2016- 1 7 confirming the turnovers and the tax liability proposed rn the sholr, cause notices dated 20.O2.2OlB. Thus as per the assessment orders, petitioner has got total tax liability of Rs.6,52,46,00 1-00. As the same was not paid by the petitioner, urgent pavment notice dated 20.O7 .2019 had to be issued. As the payments were still not made, respondents were compelled to issue garnishee notices dated 24.02.2022 in terms of Section 29 of the TVAT Act.

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18 In W.P.No.11006 of 2022 petittoner has filed reply affidavit. Stand taken by the petitioner in the reply affidavit is that petitioner had opted for payment of tax at the rate of 57o under the composition scheme by filing applications in Form VAT 250 for the works executed by him. It is contended that the second respondent having admitted that the petitioner had opted for payment of tax at 57o under the composition scheme, could not have made fresh assessment and thereby levied tax at 14.Sok consequently raising a huge demand of Rs.6,52,46,001-00. That apart, petitioner has reiterated the stand that it did not receive the pre-assessment notice as well as the assessment orders.

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19 Mr. D.Srinivas,^{lcarned senior counsel for the petitioner submits} that the short point^{involved in the two writ petitionsis rvhether a,fter} the petitioner had availed^{and paid tax under the compositionscheme,} the respondents could have^{initiated fresh assessmentproceedings} thereby levying tax at^{a much higher rate.While referring to the} averments made in^{paragraphNos.3 and 5 of the counter affidavit, he} submits that it is the admitted^{positionthat petitioner had paid tax at} 5%o under the composition^{scheme.Therefore, respondents were} bound by the^{payment made by the petitioner under the composition} scheme and could not^{have issued fresh assessment orders. This is} more so because there is^{no disputeor rather respondents have not} disputed the turnover disclosed^{by the petitioner inthe monthly} returns for the assessment^{period.If thatbe the position, respondents} could not have initiated fresh^{assessment proceedingsand lery tax at} a higher rate. To support his^{above contention, learned senior counsel} has placed reliance on a decision^{of theSupreme Court in} Koothrrttukulam Liquors u. Deputg^{Commissioner ofSales} Taxest,

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20 In his reply, Mr. K. Raji^{Reddy, learnedsenior standing counsel} submits that contention of the^{petitionerthat it did not receive pre-} assessment notice as well as the^{assessment ordersis not correct} The notice and the assessment orders were sent to^{the business}

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'1zor51^{rz scc 790}

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address of the petitioner by way of registered post with acknowledgement due. Therefore, uncier Rule 64 of the TVAT Rules, notices were validly sent and would be deemed to have been served on the petitioner. Since the petitioner did not come forward with material papers, the assessing authority had no other option but to make best judgment assessment. That apart, the assessment orders were not challenged and the consequential urgent payment notice dated 20.07 .2079 r.vas belatedlv challenged in the year 2021. In these circumstances he contends that the assessments made have attained finality and should not be disturbed.

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21 In his reply submissions, Mr. D.srinivas, rearned senior counsel for the petitioner submits that the question is not about receipt or non-receipt of pre-assessment notice or assessment orders. The question is, after accepting payment of tax under composition scheme, is it permissible for the assessing authority to resile from such position and make assessments lerying tax at a much higher rate? This he submits is not permissible and if this is not permissible then the assessments made would be non-est in the eye of law being without jurisdiction.

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22 Submissions made by learned counsei for the parties have received the due consideration of the Court. I /

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23 Section^{4 of the TVAT Act finds place in ChapterIII whichdeals} with incident,^{Iery and calculation of tax'Headingof Section4 i s} 'Charge to Tax'.^{Sub-section (7) (d) says that notwithstanding} anything contained^{in the TVAT Act, every dealer executing works} contract may in^{lieu of the amount of tax payable by him under} Clause^(a) opt^{to pay by way of compositionat the rate of 5% of the} total amount^{received or receivableby him towards execution of the} works contract^{either by himself or through sub-contractorsubjectto} such conditions^{as maybe prescribed'}

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24 Rule 17 of^{the TVAT Rules deais with treatment of u'orks} contract. While^Sub-Rule(i )^{deals with treatment of VAT dealer} executing works^{contract,Sub-Rule(2) deals with treatmentof works} contract under^{composition.Sincethis provision is relevant, the same} is extracted^hereunder:

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Treatment ofworks^contracts:

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(2) Treatment of works^{contracts undercomposrtron}

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(a) Any VAT dealer^{who executesa contract andopts to pay} ia-t a" specifr.d^{in clause (b) of sub-section (7) of section4} must register himself^{as a VAT dealer;}

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(b) The VAT^{dea'lermentionedin clause(a) abovesha1l payta'r} at' the rate of^{{ive percent(5%) of the total consideration} received or receivable^{whicheveris earlier'}

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\ (c) In thc case rvhere the^{VAT clealeroptsfor compositionhc} shall, before commencing^{the exccution of thc work notify thc} prescribed authority on^{Form VAT250 of the detarls including}

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the value of the contract on which the option has been exercised,

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Provided that a consolidated Form VA'l 2SO can a.lso be frled by the contractor who undertakes multiple works contracts of similar nature. provided further that single Form VAT 2S0 can also be filed by the contractor for the full or part of f-rnancia-l year, which will cover all the contracts on which work is commenced during the full or part finalcial yea.r as the case may be.

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(d) On receipt of any payment related to the contract, the contractor VAT dealer sha.ll calculate thc tax due at five percent (5%) of the amount received and shall enter such details on Form VAT 200. The tax due shall be paid with the return in Form VAT 200;

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(e) VAT dealer shall not be eligible for input tax credit and shall not be eligiblc to issue tax invoices;

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(f) In the case of a contractor mentioned in clause (a), if any part of the contract is awarded to a sub,contractor, the sub_ contractor shall be exempted from ta_.li on the value of the subcontract.^'l'he sub,contractor shall not bc eligible to clalm input tax credit on the inputs used in the execution of such sub-contract;

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25 Thus the above provision says that any VAT dealer who executes

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a contract and opts to pay tax by way of composition, must register himself as a vAT dealer and he shall pay tax at the rate of syo of the total consideration received or receivable. In a case where the VAT dealer opts for composition he shall before commencing execution of the work notify the prescribed authority in Form vAT 25o details of the contract on which composition option has been exercised. on receipt of the payment by the VAT dealer, he shall calculate the tax at 5% of the amount received and shall enter such details in Form VAT ,200 whereafter the tax due shall be paid along with the return in porm

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VAT 2OO.

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26 In Koothorttukulam^{Liquors u. Deputg commissioner of sales}

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Taxes (l supra)^{Supreme Courtexamined the conceptof paymentof} tax under composition^scheme '^{That was a case under the Kerala} General Sales^{Tax Act, 1963 whereunderthe appellant had opted for} composition^{of tax in terms of Section 17 thereofAfter the appellant} had closed his^{business,he had approachedthe assessing authorityto} cancel the^{permissiongranted forpayment of taxunderthe} composition^{scheme. itwas in that context that the questionfor} consideration^{belbrethe supreme court was whether the appellant} could request^{for a reguiarassessmentin the same year after opting} for composition^{of tax underSection 17 of the Kerala GeneralSales} Tax Act, 1963.^{The conceptof paymentof compounded amount of tax} was analyzed^{by the Supreme Court in the foliowing manner:}

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The concept^{of payment of compoundedamountoI tax is a bilateral} "g.";;.;i State Covernment^{i"t*"",i tn. is empowered paitiesrne to accept schime a lump of composition sum- amount provides in Iieu that ol thcta-x} ;;;;-;t ;" payable tv^{rhe dealerin respictof such goods or class of soods and} i; ";;; p;;d." may be of ^gt"td indettaiting^{upon' For to pay Lhat. Lhe purpose sales tdx rn the deaier iump is sum obligcdand} i" """,i "" the same^{is assessed} ^geme.tt^{at an agreed totJust'l\ it^ged undcrthe A't ilself 'fhe} ;;;;; ""^{introduced by thilegislature providesfor a brlateralagreement} ;;i;;;; ;" ".""".." ",,i^{the SalisTa-xAuthoritieswithan objcct lo dispense} ;;i;;; ;;;"i."*.nt of regular assessment^{andlor the casvpurposeol levv and} .oii..,io., oi^{theta-xpayabic under the Act A clcaler'rl'ho has optcdlbr payment} ;i i;;; ""-^{amount in lieuof tax, is not requiredto filc monthlr-' cluarterly or} annLlal returns^{ol hrsturnoYer'll is the choice oI a dt:aler to opl lbr compoundcd} ,".1 if the said^{choice is in accordanceu,,th the s'heme and is} ;;;;;;;;i."; iriii-"t"tv accepled^{bv the authoritY concernecfit becomesan agrecdamount of} iu-...^'lh" i.p"r,-".,t^{and thc dealer are thcreaitcrbound by the said agreement'} 27 According to the^{Supreme Court,payment of tax under the} composition^{scheme is a bilateralagreement betweenthe parties The} scheme provides^{for a bilateralagreement between an assessee and} the taxing authority^{with an objectto dispense urith the requirementof}

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regular assessment a.d for the easy purpose of lely and collection of tax' It is the choice of a dearer to opt for compounded payment of tax and if the said choice is in accordance with the scheme and is accepted by the taxing authority, it becomes an agreed amount of tax. Thereafter, the department and dealer are bound by the said agreement.

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28 Supreme Court further held as flollows:

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. 20, The compounding of the tax by way oI contract of payment of tax is a lump sum on the value of contract on aJl agreed .at.. The contract ol compounding is a statutory contract under a scheme, in which the State Government can increase or decrease the rate of compounding of tax. It is an invitation to oller for compounding for each financial year^_resultlng rn an agreement qua such financial year. Therefore, the contract between the assessee and the assessing authority can be then annlrlled by the parties onlv under the crrcumstances whjch are provided undcr the provrsrons oI thc Contr;ct Act. The ri€{hl to rescind from the contracl is availablc to thc asscssee oniy uncler the circumstances prevailing under the Contract Act. l.he term ,ircscind" as expiained in the Cont.acts Act, 1872 is^,,revocatron of conLract b-y aln ijxpress and, unequ.ivocal cancellation by one party',. Thc rlght of rcscission is oniy available u,hen the conscnt ol the partv is oblaine.l b1,-[rauc1, rn isreprcsen tation, cocrcion or undue influencc. Thc.efore, Lhe dcaler having once exerciscd its option under the composition scheme cannot, ihercfore li permitted to turn around and rescrnd lrom its liabilitl, merelv on th. grou.,j lhat he hacl no turnover due to losses or had not donc anv manufacruring aclivity during the relevant )ear onlv lbr the rcason that amount pavablc uJclcr rhe-co-pos,t,nn schcmc is not relatable to ant annual turnovcr but depen.ls upon the agrcemenr under thc schemc at the option of the dcaler. In othcr rvords, the assessee once having optcd Ior compositton and upon thc completion of assessmen! cannot blow hot and cold at the same tlme, rcquesting the assessment authority for rcgular assessment under the Act.

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29 Finally Supreme Court held that composition of tax is nothing but a. alternative route to assessment regulated by the terms of the contract between the assessee and the assessing authority to arrive at the same destination - Therefore, the dealer who had voluntarily and with full knowledge of the alternate method of taxation had opted to be governed by it, he cannot in the lean season claim that his assessment for the very same assessment year be made under regular assessment.

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30 As held^{by the SupremeCourt payment and acceptance of tax} under the composition^{scheme is a statutory contractbetweenthe} dealer and^{the assessing authority'}

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J1 Once the contract^{is alfected by way of payment of composition} tax and acceptance^{thereof, both the parties are bound by the} contract

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32Intheinstantcasethereisnodisputethatfortheassessment periods under consideration^{petitioner had already paid tax underthe} composition'scheme.^{Respondents have also not disputed the turnover} figures of the^{petitioner.If that be the position and having regardto} the 1aw laid^{by the SupremeCourt in KoothattukulamLiquors u'} Deputg Commissioner^{of Sales Taxes (1 supra) it was not open to} the respondents^{tohave resorted to regular assessments of the} petitioner for the^{verysameassessment periods and thereafterlevy tax} at a much higher^{rate.We agree with the submission made by Mr'} Srinivas, learned^{senior counsel for the petitioner that this isa} jurisdictional fact which^{goes to the root of the matter'If there is} payment of tax under^{the compositionscheme,questionof regular} assessment^{would not arise. In such circumstances receipt or non-} receipt of^{pre-assessmentnotices or assessmentordeis would have no} significance or^{bearing as those are besidesthe point'When an action}

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IS without jurisdiction, the fact that the same has been put to challenge after two years would not be of material consequence.

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33 Resultantly, the impugned urgent payment notice dated 20.O7.2O\9 and the consequential garnishee notices dated 24.O2.2022 being wholly untenable in law and. fact are hereby set aside and quashed.

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34 Both the writ petitions are accordingly allowed. However, there shal1 be no order as to costs. Miscellaneous petitions if any pending

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il -!t 9*-!yg-^{yritp*etiti on s sh alls tand clo se d.}

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SD/.MOHD,SANAULLAH ANSA ASSISTANT REGIST

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