Dismissed

Mahindra Logistic Limited v. State Tax Officer-1 and 3 Others

Telangana HC19 Sept 2022WP/30530/2022

Case brief

AI extract

What is this about?

Writ petition challenging penalty assessed under Section 53(1)(ii) of TVAT Act without personal hearing. The High Court dismissed the petition, noting an adequate statutory remedy under Section 31 of the VAT Act was available, without expressing an opinion on merits.

What did the court decide?

Writ petition dismissed; no costs awarded; petition to be pursued before appellate forum if applicable.

Mahindra Logistic Limited Vs State Tax… — Pension and Retirement Benefits | Telangana HC (2022)

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

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MONDAY, THE NINETEENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY

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WRIT PETITION NO: 30530 OF 2022

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Between:

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Mahindra Logistic Limited, rep. by its Chief Financial Officer Mr. Yogesh Patel, 6-3-1089/F Level-2, RVR Towers, Raj Bhavan Road, Somajiguda, Hyderabad.

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..,PETITIONER

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AND

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'1. State Tax Officer-1, Maredpally Circle, Begumpet Division, Hyderabad - 500016,

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Assistant Commissioner (ST), Circle, Begumpet 6th Floor, Pavani Prestige, Ameerpet, Hyderabad - 500016.

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Commissioner of Commercial Tax, C.T. Complex, Nampally, Hyderabad - 500001.

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State of Telangana, Rep. by its Principal Secretary to Government, Revenue (CT-ll) Department, Secretariat, 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 a Writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of lndia declaring the penalty Assessment Order No. 15712 daled 1610O12022 passed by the Respondent No.1 without hearing the Petitioner and imposing penalty of 3,49,72,022 under Section 53(1Xii) of the TVAT Act as illegal, arbitrary, u nco nstitution al, contrary to the provision of TVAT Act and further direct the Respondents to refrain from taking steps in furtherance of and/or in implementation of the penalty Assessment Order No. 15712 dated 16106t2022 and for recovery of the penalty amount of Rs.3,49,72,022

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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 grant stay to the recovery of the penalty amount pending the disposal of the writ petitior as otherwise the Petitioner will be put to serye loss and hardships

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Counsel for the Petitioner: SRI S. VIVEK CHANDRA SEKHAR

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Counsel for the Respondents: SRI K. RAJI REDDY (SC FOR COMMERCIAL TAX)

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The Co lrt made the following: ORDER

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THE HON'BLE TH CHIEIJ IUSTICE UITAL^B AN

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AND

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THE ON'BLE SRI II]STICE C.V. I]I IASKAR EDDY W.P.No.30530 o f2022

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ORDER,^('rr r/z^{Han'bhrheChte/lurivLiiialBLtlan)}

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F{eard Mr. S. Vivek Chandrasekhar,^{leamed counsel for the} petitioner and Mr. K.^{R^,i Reddy, leamed Senior Standing Counsel,} Commercial^{Tax for the resPondents.}

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This maner^{wasadjoumed on four occasionsearlier at the} admission stage. Accordingly,^{it has been listed today under the} caption'for dismissal'.

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Leamed counsel for^the Petitioner^{has argued the matter on} merits. FIe submits that^{the writ petition challengesnotification of} penalty dated 1.6.06.2022^{whereby penalryof Rs. 3,49,72,022'00 has} been levied on the^petitioner.

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4, Petitioner is a^{dealerunderthe TelanganaValueAdded Tax} Act, 2005 ftriefly'the^{VAT Act' hereinafter).For the tax period} NgL,2Ol5^{to June,2017, assessmentwas complercd byrespondent}

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Nc,.1 whereafter, the tax to be paid bythe petitioner was quantified at 1is.13,98,88,089.00.

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Since there was under declaration of tax, notice was issued to the petitioner by rcspondent No.1 on 04.03.2021 as to whypenalry @^{25o/o of the quantifiedtax should not be levied under} Section 53(00r) of the VAT Act. Accordingly, it was proposed to lelv penalry of Rs. 3,49,72,022.00 i.e., 25o/o of the quantified tax. Petitioner was called upon to file objection, if any.

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Petitioner submitted objection dated 11.03.2021 contending that proposed lery of penalty was not justified. Finally, it was submitted that if respondent No.1 did not agree with the submissions of the petitioner, it should be granted opportuniry of being heard before taking any decision adverse to the petitioner. By the order dated 16.06.2022, objection filed by the peririoner was not accepted as being unteqble and accordingly, the proposed levy of penalry has been confirmed. It is this order which has been impugned in the present proceeding.

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--1

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Leamed counsel for the Petitioner^{submitsthat u"henthe} petitioner had sought for^{a penonal hearing, respondentNo'1} ought to have granted^{personal hearing to the petitioner.Failureto} do so has vitiated the^{impugned order being violative of the} principles of natural^{justice. In this connection,he has placed} reliance on a number of^{decisionsincluding BA ContinuumIndia} Pvt. Ltd. v. Union^{of Indial,and order datedZ6.0+.2005passed} by a Division^{Bench of the then combined F[gh Coun of Andhra} Pradesh inV.P.No.^{8334 of 2005.}

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On the other^{hand, leamed Senior Standing C-ounsel for the} respondents submits that^{against the order of assessment} dated OZ.Ot.2O2l, petitioner^{filed an appealbefore the first} Appellate Authoriry and^{thereafter furtherappeal before the} Telangana VAT Tribunal^{at Hlderabad, whichis pending'Against} .an^{order of penalryappeal lies under Secdon31 of the VAT Acl} Therefore, petitioner^{should be relegatedto the forum of appeal'}

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1 2o2r (049) csrl- o37o (Bo-.)

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1ffe have heard leamed counsel for the parties and considered thr: materials on record including the decisions relied upon by learned counsel for the petitioner.

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\Xihile it is true that petitioner had prapd for an opponuniry of being heard before respondent No.1 in the event any adverse orcler was proposed to be passed, nonetheless from a perusal of the lanquage emploled in Section 53 of the VAT Act, ir is debatabie as to whether opportunity of being heard provided thereunder would include personal hearing.

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1.1.. At this stagi:, learned counsel for the respondent submits that wht:n there is under payment of tax, levy of penalty is aurornric.

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{^t'12: \We do not intend to enter into a disctssion on the above

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aspect. More so becarxe,: fititioner has got an adequate and efficacious remedy under the statute by way of appeal under Seoion 31 of the VAT Act. Any deliberation on the above aspect ma)' cause prejudice to the parries. We therefore, relegate the petirioner to the forum of appeal under Section 31 of the VAT Act.

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