August 25, 2021 6:06:21 am
THE APEX court has set aside the order of the Punjab and Haryana High Court which stayed the proceedings of pursuance of notices initiated for the recovery of money in connection with multi-crore value added tax (VAT) against 47 companies. The apex court issued the orders while hearing the special leave petition (SLP) of the UT Administration against the high court decision on August 13.
A detailed order reached UT administration Tuesday.
In the detailed order, the apex court observes, “Entertaining the petition under Article 226 overreaches the jurisdiction of this Court. The pendency of the earlier proceedings was evidently brought to the notice of the HC since it has been referred to in the impugned order. The HCshould have deferred to the proceedings pending before this court.”
The UT Administration had issued a second notice under Section 29 (2) of the Punjab Value Added Tax Act, 2005 against one of the companies out of 47, M/s Shiva Traders. The notice against the company was issued on February 18. A total of 47 companies were identified for evading the multi-crore VAT for not submitting the annual statements under Rule 40 of the Punjab Value Added Tax, Rules, 2005, in 2019.
These companies had obtained a stay on the earlier issued notices from the high court in February 2020. Against the high court decision, UT Administration filed an SLP in the apex court, which put a stay on the stay orders of the HC. Sources said that M/s Shiv Traders had filed two applications — one in the apex court interlocutory and another seeking the stay on the pursuance of the notices in the high court.
The apex court observed, “The respondent took recourse to the pending proceedings before this Court by filing an interlocutory application where two specific reliefs were sought, namely, (i) an order of restraint on the assessing officer from proceeding ahead with the assessment notices; and (ii) alternatively a restraint from proceeding ahead with the assessment notices which were issued in pursuance of the order dated 1 December 2020. Proceedings are pending before the court. Instead of pursuing the interlocutory application to its logical conclusion, the respondent chose to institute a fresh writ petition before the High Court, which the HC has entertained and it stayed the notice which was issued in continuation of the earlier notice under Section 29(2). Entertaining the petition under Article 226 overreaches the jurisdiction of this Court.”
The apex court further stated, “We accordingly allow the appeal and set aside the impugned order of the HC dated 1 March.” The excise and taxation department had smelled a multi-crore scam on part of a number of private firms, which did not submit the annual statement under Rule 40 of the Punjab VAT Rules, 2005, which is applicable here too. The statements were released for 2010-11 and notices were issued in 2019.
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