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VAT scam: Supreme Court stays High Court order on 47 excise notices

The Punjab and Haryana HC had put a stay on the notices in February.

Written by Saurabh Prashar | Chandigarh | December 2, 2020 11:22:48 am
Supreme Court of India

In a significant development, the apex court Tuesday ordered a stay on the order of the Punjab and Haryana HC, which had set aside at least 47 notices of the UT excise and taxation department issued under Section 29 (2) of the Punjab Value Added Tax Act, 2005, against 53 private firms in 2019.

The notices were issued when the UT excise and taxation department had smelled a multi-crore fraud by several private firms while making fake computer entries and fake invoices.

The Punjab and Haryana HC had put a stay on the notices in February.

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 Value Added Tax Rules, 2005, which is applicable in Chandigarh too. The annual statements were released for the assessment year 2010-11. The notices were issued in 2019.

One of the firms, M/s Shiva Traders, had approached the High Court against 47 notices claiming that the notices were issued beyond the time limit. The petitioner had argued that the administration can challenge the submitted annual statements only within six years of filing of statement under Section 29 (4) of the Punjab Value Added Tax Rules, 2005.

It had argued the assessment year was 2010-11 and the annual statement was to be filed in November 2011. The six years expired on November 19, 2017, but the notices were issued in 2019, which was beyond time limit.

The High Court had ordered that admittedly the notices are beyond time limit and it is in these circumstances that interference is made in the writ petitions. The impugned notices/assessment orders are set aside. However, it is clarified that the respondents shall be at liberty to proceed against the petitioners in accordance with law if so advised.

On this, the UT Administration filed a special leave petition in the Supreme Court.

The High Court had stated that considering the magnitude of the alleged fraud vis-a-vis the number of cases and the amount involved, as it is pleaded that in a single case there was involvement of Rs 60 crore, one of the petitions from the bunch has been kept pending for the respondents to file a status report on various aspects of the matter.

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