Valid service of assessment orders is crucial for enforcing tax recovery measures such as attachment notices under relevant tax acts.

JUDGMENT :

S. RAVINDRA BHAT, J.

1. The appeal was heard, with consent of counsel for the parties. The appellant, Commercial Tax Officer (hereafter called “the revenue”) is aggrieved by the judgment and order of the Telangana High Court¹[Dated 28.09.2021 in WP No. 3703/2020], by which a writ petition filed by the respondent (hereafter “the assessee”) was allowed.

2. The assessee questioned the revenue, complaining that it did not provide copies of assessment order for the years 2005-06, 2008-09, 2009-10, and 201011 under the Andhra Pradesh General Sales Tax Act, 1957 (hereafter “APGST Act”) and Telangana State Value Added Tax Act, 2005 (hereafter “VAT Act”) and for not lifting attachment order dated 03.02.2012 and another, revised attachment order 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 2001-02 and 2003-04 were revised on 24.04.2005 resulting in excess tax collection; it requested that such excess tax collected be adjusted for the subsequent demand. According to the assessee, the revenue thereafter did not issue any further notice and after lapse of about six years, issued a revised notice in Form V dated 20.02.2018 showing arrears of tax in a sum of Rs. 5,59,78,758/-for the tax periods 2005-06 to 2008-09, 2009-10 and 2010-11 and attached land and building (belonging to the assessee) being Sy. No.182 -H.No.7-3-52/1/2 situated at Gaganpahad village, Rajender Nagar Mandal, Ranga Reddy district measuring 2,224.05 square yards. The assessee relied on various representations²[Dated 18.06.2018, 16.07.2018, 23.08.2018, 24.10.2018, 05.03.2019, 18.06.2019, and 04.11.2019.] asking the revenue to cancel the demand and attachment notices.

4. It was also urged that, though the assessee made several requests for furnishing copies of assessment orders and also the date of service of such orders passed, the revenue maintained silence, and provided neither. The assessee therefore urged that without effecting the service of the assessment orders, as mandated by law, the revenue could not claim tax shown as arrears, and could not resort to provisions of the RR Act, attaching its properties.

5. The revenue, in its return, resisted the claim and urged that the assessee engaged itself in the business of manufacturing and selling HR strips, sections, and pipes and effected intra-state and inter-state sales. For AY 2005-06 to 200809, it was issued with show cause notice in Form VAT 305A on 06.06.2009 proposing to raise a demand of Rs. 1,86,80,708/-. Objections were called for, from the assessee which were not filed till 06.07.2009. Consequently, assessment orders were passed on 07.07.2009 confirming the tax demand as proposed in the show cause notice. This assessment order was challenged before the High Court in a writ petition³[W.P. No. 27331/ 2009]; which was disposed of by the court on 15.04.2010 permitting the assessee to fil