IJM (India) Infrastructure Limited vs Commercial Tax Officer & Ors.

As a very short question is involved in the matter and as the issue of recovery from the petitioner under Section 28(1) of the Madhya Pradesh VAT Act, 2002 (hereinafter referred to as the Act, 2002) has to be remanded back to the Assessing Officer, namely, Respondent No.1, we dispose of this matter at this stage itself.

Certain contract was entered into in the matter of construction of a road and in the contract in question, sub contracts and various other agreements were entered into. However, the fact remains that exercising the power available to him under Section 28(1) of the Act, 2002, Respondent No.1/, the Assessing Officer initiated recovery proceedings and assessed due to be paid by the petitioner at Rs.21,89,060/- and challenging this recovery, this writ petition has been filed.

Even though, various grounds are raised in the matter pertaining to liability of the petitioner, the effect of contracts and sub contracts entered into but the sole legal question canvassed in the writ petition before us at the time of hearing today, is that for initiating special proceedings under Section 28(1) of the Act, contemplates provision for recovery of tax by issuing the show cause notice as recovery of arrears of land revenue. Petitioner has specifically stated that Section 28(1) contemplates a provision of issuing notice to the person concerned from whom the recovery is to be made and, thereafter, make recovery.

It is the case of the petitioner that no notice, as contemplated under Section 28(1) of the Act, was issued to the petitioner and, therefore, the entire proceeding and the assessment made is unsustainable.

Respondent No.1 on notice being issued have only filed a preliminary objection and raised grounds about availability of alternate remedy of appeal before the competent authority and the inter se liability arising into the matter on account of contract and sub contracts. However, there is no specific reply to indicate as to how and in what manner the notice required under Section 28(1) of the Act was issued and served on the petitioner, how opportunity of hearing was granted to the petitioner. In the absence of there being specific avernments in this regard, it is a fit case, where the matter should be remanded back to Respondent No.1 for proceeding from the stage of notice under Section 28(1) of the Act.

Accordingly, without entering into the controversy on merit and various issue raised in the writ petition and leaving these issues open to be raised before Respondent No.1, this writ petition is allowed in part. We quash the impugned order of recovery and direct Respondent No.1 to proceed in the matter from the stage of issuance of notice under Section 28(1) and conclude it in accordance with law after hearing all concerned.

Interim protection and the interim orders passed with regard to deposit of the amount and security furnished shall continue to remain in operation till finalization of the proceedings under Section 28(1) of the Act by the Assessing Officer.

With the aforesaid, this writ petition stands disposed of.