Arbitrary Orders Driving Taxpayer To File Appeal By Depositing 50% Of The Disputed Taxes: Tripura High Court Imposes Cost Of Rs. 25,000 On The Taxes Recoverable From His Salary

The Tripura High Court has imposed a cost of Rs. 25,000/- on the Commissioner of Taxes to be recovered from his salary and to be paid to the Tripura High Court Bar Association for passing an order in an arbitrary manner.The division bench of Acting Chief Justice T. Amarnath Goud and Justice Arindam Lodh observed that orders were passed by the authorities in an arbitrary manner, which was driving taxpayers to file appeals by depositing 50% of the disputed taxes. The Court also ruled that a taxpayer or dealer cannot be made to suffer as a result of the tax authorities lax approach and that the officers must be more vigilant and tax-friendly.The petitioner/assessee filed their returns under the TVAT Act of 2004. It was recorded that the petitioner had paid Rs. 33,32,202 as an excess tax amount for the assessment year 2016–17, and a part of the same was adjusted against the tax liability for the year 2017–18. After adjustment of the amount of tax refundable for the assessment year 2016–17, the total amount refundable to the petitioner was Rs. 30,25,031.The petitioner prayed for a refund of the excess amount paid, but he received a notice. The notice stated that the petitioner had made excess payment of tax to the tune of Rs. 30,25,031. The petitioner submitted his reply dated June 11, 2020, and on receipt of the same, the respondent issued the impugned notice dated May 21, 2020, upon the petitioner.On receipt of the said notice dated May 21, 2020, the petitioner has submitted his reply, in which he seeks a refund of the amount of Rs. 30,25,031 as excess tax paid for the assessment year 2017-18. On December 10, 2020, the respondent issued an order without addressing the petitioner's grievance or giving the petitioner any opportunity to be heard personally. The respondent observed that the petitioner made excess payments during 2016–17 and there was no payment of tax during 2017–18 (up to June 2017), but it has not been clearly reflected in the assessment order dated May 3, 2019.The respondent remanded the case to the Superintendent of Taxes, Charge-V, Agartala, for a fresh assessment and year-by-year recording of tax payments, liabilities, and so on, and for passing a detailed and reasoned order within the next three months after giving the dealer a reasonable opportunity to be heard.The department contended that there was no jurisdictional error in completing the assessment, and thus, the order dated May 3, 2019, passed by the Commissioner of Taxes is absolutely illegal. The Commissioner of Taxes, without assuming jurisdiction under Section 70(1) of the Act, has passed the order. There was no error in the original assessment done by the assessing officer. There was no prejudice to the interest of the state's revenue.The court, while setting aside the Commissioner of Taxes' suo moto revisional order, held that there was no jurisdictional error in the Assessing Authority's assessment and that the Revisional Authority, namely the Commissioner of Taxes, went beyond the provisions of the Act in issuing the notice and the order.The Court stated that the authorities acting as a quasi-judicial authority by invoking powers under the Statute are expected to act judicially and are not expected to work as a money-generating authority.The Court, while not appreciating the action of the authority while allowing the writ application, imposed a cost of Rs. 25,000 from the Commissioner of Taxes to be recovered from the salary.Case Title: Megha Technical and Engineer Private Limited Versus The State of TripuraCase No: W.P.(C) 696/2021Citation: 2023 LiveLaw (Trip) 8Date: 14/03/2023Counsel For Petitioner: Ashok Saraf, P. Baruah, Kousik RoyCounsel For Respondent: K. DeyClick Here To Read The Order

Arbitrary Orders Driving Taxpayer To File Appeal By Depositing 50% Of The Disputed Taxes: Tripura High Court Imposes Cost Of Rs. 25,000 On The Taxes Recoverable From His Salary

Mariya Paliwala

Tags