Dismissed

M/s. Hame Trading Company v. Commercial Tax Officer

Telangana HC10 Aug 2023WP/19220/2023

Case brief

AI extract

What is this about?

The Division Bench dismissed the writ petition challenging a Commercial Tax assessment order and subsequent garnishee notice. The Court held that notices were validly served via registered post and email, and the petitioner was barred from invoking Article 226 due to the failure to file an appeal under the VAT Act.

What did the court decide?

Writ petition dismissed on all grounds with no order as to costs.

M/s. Hame Trading Company Vs… — Constitutional and Fundamental Rights | Telangana HC (2023)

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[³³⁸⁶ ]

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

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THURSDAY, THE TENTH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE

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PRESENT

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THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY

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WRIT PETITION NO:^'19220 OF 2023

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Between:

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[//s. Hame Trading Company, rep. by its Partner, Mr. Ramesh Kumar Chaudhary, 1-3712813 First Floor, Srinivas Reddy Colony, It/edipally Khaman, Hyderabad, Rangareddy, Telangana-500 098

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...PETITIONER

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AND

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1 Commercial Tax Officer, Nacharam-1 Circle, Saroor Nagar Division, Hyderabad.

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2 The Manager, lClCl Bank, Vikas Puri A Block Branch, Delhi.

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aJ 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 ot 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 any other appropriate writ or order or direction setting aside the assessment order of the 1't Respondent^passed in AO No.53858, dated 31.03.2020 for the assessment^year 2015-16 under the Central Sales Tax Act, 1956 as being illegal and^{in violation} of^principles of^natural justice and cohsequently set-aside the Garnishee notice issued by the 1st Respondent to the 2nd Respondent.

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lA NO: 1 OF 2023

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Petition under Section 1 51 CPC praying that rn the c ir,.;urr stances stated in the affidavit filed in support of the petition, the High Court rnay be pleased to grant stay of recov:ry of the disputed tax of Rs.3,46.91 4/ prrsuant to the impugned order of tl- e 1 st Respondent dated 31 .3.2021) for thc assessment year 2O15-16 under the IST Act, 1956,^pending disposa of tire Writ Petition, as otherwise the Petitiorrer will be^put to severe loss and hardsh^p.

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lA NO: 2 OF 2023

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Petition under Section 151 CPC praying that in the c rcum;tances stated in the affidavit filed in support of the petition, the High Courl nray be pleased to suspend the Garnishee notice issued by the 1st Resprrnlert to the 2nd Respondent in pursrrance of the impugned order d.)ted :;1 03.2020 pending disposal of the Writ Petition, as otherwise the Petitioner will be rut to severe loss and hardship.

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Counsel for the Petitioner: SRI P.KARTHIK RAMANA

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Counsel for the Respondent No.1 & 3: GP FOR COMMERCIAL T,AJ(

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Counsel forthe Respondent No.2: -

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The Court made the f rllowing: ORDER

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HONOURABLE SRI JUSTICE P.SAM KOSHY AND

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HON'BLE SRI JUSTICE I,AXMI NARAYANA ALISHETTY

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WRIT PETITION NO.19220 OF 2023

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ORDER: (per llon'ble Sri Justice Loxnt langarLa Atishettgl

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Heard learned counsel Sri P.Karthik Ramaa for the petitioner and the learned standing counscl for Commercial Tax.

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The instant writ petition is filed by the petitioner to set aside the Assessment Order No.5l)858, dated 31.03.2020 for the assessment year 2015-16 under Cerrtral Sales Act, 1956 (for short, 'CST ActJ, and consequently, s(t aside the Garnishee Notice issued by the 1st respondent lo the 2"d rcspondent.

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The brief facts as culled out from the writ petition are as under:

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Petitioner is a dealer, registered under the Telangana Value Added Tax Act, 2005 (for short, VAT Act') as well as CST Act on the rolls of lst respondent and errgaged in the business of sale of Footwear and Home furnishings products. Petitioner filed returns for the assessment year 2015-16 bol.h under the VAT Act and also under the CST Act to net turnover of Rs.1O,O9,69l /-. During the assessment year, petitioner received goods i.e., footwear and home furnishings worth Rs.24,O4,7OOl- from its head office. In respect of

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footu,ear, they are exemptr:d liorn VAT for a v rluc ,r1.ro Rs.500/- in i)clhi.

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Petitioner received first shorv-cause noti( e on 0,J.11.2017 ancl second sholv-c, use notice, dated 05.11.2019 lrom thc ls' rcspondent through e-mail and to which petitioner submltted rer;lv vide letter dated 17.11.2019 stating that thu'ir consultanl had u rorLgly shown the supplies frorn New Delhi to Hyderabad as Branch Tran;fer (Sales) instead of Bran:h Transfer (Purcl'rases) and have al:;o attachcd the stock transfer cc nsignment notes along with repl'i.

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Petitionervas informed bf its Bank i.e., 2nr resporrdcnt that an amount of Rs.8,1i1,000/- was marked as lien pursuarit to he notice issued by the 1st respondent for recovery of Rs.8,5O,8i'3^/ - t)ertaining to dues under the under CST Act for the years 2015 1,, and 201617. On enquiry, petitioner came to know that ar ass3ssm,lnt order was passed on 31.O3.2O2O raising a demand of Rs.3.4(r,9 14 l- ark., submitted letter clated i3.O5.2023 to the l^st resp,onde rt br nging to their notice that no show-cause notice was serve,l on thc petitioner prior to passing ttte order and assessment order v'as not received by the petitioner and that petitioner has only a web copy of thc order downloaded from t:re Departmental website.

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Petitioner assailed the order dated 31.03.2'02O or r f<rllowing grounds:

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(i) that the impugned order is in violation of principles of natural^justice;

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(ii) Petitioner is not serv<:d with the show-cause notice as well as assessment order;

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(iii) The impugned crdcr is bevonci the timc;

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(iv) Service of notice or order by e-mail is not recognized as per Rule 64 of the Te langar ra VAT Ruies, 2005 (for short, VAT RulesJ.

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karned counsel for petitioner would submit that petitioner's branch in Hyderabad was closecl and it had not received either showcause notice or assessment order. He further submits that service of notice by way of e-mail is not a proper service and contrary to Rule 64 of the VAT Rules, as per which, notice has to be issued through registered post, which is not complied with and as such, the assessment order, dated 31.03.2020, is illegal and Iiable to be set aside.

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Learned counsel for petitioner has relied upon the judgmenl of Division Bench of this Hon'ble Court in W.P.No. 19487 o{ 2O2O, wherein similar issue was considered. In the said case, notice was not served either personally or by registered post and further, the assessment order was communicated to petitioner through Whatsapp to the petitioner's representative after a delay of six months after passing of the assessment order. In those circumstances, the Hon'ble

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{

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Cr-rurt l-reld tt at there has bcen violation o: princrplcr; o[ natural justicc on i1( c()unt of non-se rvice of shor cause notice on the petitioner prirrr to passing of the asscssmenL orrlcr by thc l.t rcsponde nt in thc manner indicatec in Rule 64 of th:^/1'l Rules

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On thc ol-her hand, lcarned stancling rounsicl u',ruld submit that shos,-causrr notice and final asscssment order u't:rr sent to thc address, whiclr is provided by the petitioner and in li ct, the address shclrvn in the ))resent writ petition is also same, to wlriclr notice was sent. Therefor e, petitioner ought to have challengerl ire asscssmcnt ordcr by lrerl' of filing an appeal under Section 31 r,l t^'re VAT Act. Hou,ever, petit oner failed to avail effective and efhcac- our; alternative rcmcd5, and, -herefore, cannot invoke jurisdiction ol this Hon'blc Court under llticle 226 of the Constitution ,;f IncLia. Hcnce, Writ Petition deserv:s to be dismissed.

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In supp<,rt of his contention, learned strnding counsel placed reliance on th(: decision of Division Benr:h of thi:r Court in W.P-No.34019 of 2Ol2 dated 2O.11.2013, wherein sirr.rilar issuc was considered, wlere notice sent through register-ed pos /ls rcturned un-served and Court has came to conclusion that nol ice sent bv the registered post or place or business or dealer is suffi<:it:nt ;ervice both under clause (z ) and clause (b) of Rule 64(1).

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I I

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I l. The matcrial placcd beforc this Court clearly indicates that show-cause notice and final assessment orderwere sent through registered post and also through e-mail to thc address provided by the petitioner, which is the same as is mentioned in the cause title in this writ petition. Therefore, the contention of thc petitioner that Rule 64 of the Rules, 2OO5 is not complied with is not correct.

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lt appears that Notice of Arrears, dated 23.03.202 i was also sent through e-mail to the petil-ioner on the same day. Subsequcnt Arrears Notices dated 03.05.2021 and 02.12.2021 were also sent to the petitioner through e-mail. It is relevant to mention that in response to notice dated 05. ll.2o19, the petirioner sent reply on 17.ll.21l9, therefore, contention of the learned counsel for the petitioner that there was no proper notice is in correct. In considdrsid opinion of this Court, notice sent through registered post is a proper service and moreover, the petitioner has also submitted reply to one of the show-cause notices and further arrears of notices were sent through e-mail to the petitioner and as such, there are clear latches, delay on the part of the petitioner in not challenging the final assessment order by way of appeal, which is provided under Section 31 of the VAT Act and there is no plausible explanation for the delay in approaching this Hon'ble Court.

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1'hc pet tioncr:rlso raiscd ground o[ passir-rg ol imlrugned order bc1,61,,6 thc tir-rc linrit ol' four vears. As can b^' seett lron tirc rec ord, the asse ssnrcnt ordcr challengcd irr this l rit perition is ol' thc assessment r',:ar 2015 l6 and u.hercas the .rssessr rcnt ordcr rvas passed on^.i I O3.2020 and, thcre[orc. the sarne i:;^,r'itlrin the Limc limit ol fc,ur r.ca|s and tl.rc r|rit pctitior.r also fai,s on th s ground also.

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Thcrelore petitioncr is not entitled to inv rke^jrrnsdiclion ol this Hon'blc Coirrt undr:r Articlc 226 of the Conslitution ol lndia ur.rder Rule 1 4 (A) of he CST (Telangana) Rules and, thcrelbrc, l)rcsent Writ Petition fails orr all grounds and is accordinglv ,lismi;s:d.^'l'here shall be no ordCr i1s lo costs.

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Pcndinl; miscellaneous applications, if any, slra Ll st and closed

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To,

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SD/.V.KAVITHA ASSTSt AyT.REGtSTRAR //TRUE COPY// ( rl-, SEC-'ION OFFICER

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1 One CC to SRI P KARTHIK RAMANA, Advocate [CrpUC] 2 Two CCs to OP FOR COMMERCIAL TAX, High Co-rrt for the State of Telangana at H Tderabad [OUT]

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J. Two CD Copies 8SR GJP 2,

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HIGH COURT