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Judgment
Heard Mr. P.K.R Coudhury, learned counsel for the petitioner and Mr. B. Gogoi, learned Standing Counsel for the Taxation Department.
The petitioner earlier undertook the business of dealership of Maruti Suzuki India Limited and was operating the same in the name of M/s
Progressive Motors, Dimapur. The dealership was awarded sometime in the year 2000 for sales and service of Maruti vehicles in the Rangajan Tiniali
area of Golaghat district. The petitioner was granted a license bearing No.AS-05/TC-0012 dated 02.08.2001 by the District Transport Officer. Initially
the dealership business operated by the petitioner was handed over to the respondent No.5 through the means of a Power of Attorney bearing
registered deed No.1456/2004 dated 01.09.2004. Later on, by an agreement of sale dated 11.07.2008, the petitioner sold the aforesaid dealership to the
respondent No.5. A Photocopy of the deed of sale is annexed as Annexure-5 page-32 to the writ petition, which bears the signature of the petitioner
as well as the respondent No.5 along with two other witnesses.
It has also been brought to the notice of the Court that in the local newspaper namely The Assam Tribune dated 30.04.2011, the dealership namely
M/s Progressive Motors, Dimapur had issued a public notice informing that the dealership had been sold to the respondent No.5 at a mutual agreed
price. The petitioner also relies upon a notice issued by the Assam Gramin Vikash Bank u/s 13(2) of the SARFAESI Act, which was addressed to the
respondent No.5 by stating it to be in care of Progressive Motors.
In the aforesaid background, demand notices u/s 37 of the Assam Value Added Tax Act were issued to the dealer Progressive Motors, Rangajan
Tiniali where the name of the proprietor was shown to be the petitioner are assailed in the writ petition. The notices were of the financial years 2008-
09, 2009-10, 2010-11, 2011-12 to 2012-13.
Against the said notices u/s 37, the petitioner by his reply dated 23.12.2013, indicated that the dealership business in question since its inception
belonged to the respondent No.5.
In the circumstance, the demand notice dated 28.08.2014 was issued by the Assistant Commissioner of Tax, Golaghat. In the said notice, the earlier
notices were referred and the reply of the petitioner dated 23.12.2013 was also indicated. The demand for tax as per the notice of 28.08.2014 is as
follows:-
2008-09 : Rs.1,98,122.00
2009-10 : Rs.4,49,063.00
2010-11 : Rs. 11,670.00
2011-12 : Rs.25,03,094.00
Total : Rs.31,61,949.00
To the said demand notice, the petitioner submitted a detailed reply dated 10.09.2014. In the reply of 10.09.2014, the petitioner had taken the stand
that by a Power of Attorney dated 01.04.2004, the business was handed over to the respondent No.5 and thereafter by a sale deed dated 11.07.2008,
the dealership business was sold to the respondent No.5. Thereupon, the respondent authorities issued the further demand notice dated 19.09.2014. In
the demand notice of 19.09.2014, although the Assistant Commissioner of Tax records the reply of the petitioner dated 10.09.2014, but it does not
indicate in any manner as to whether the stand taken by the petitioner that in the year 2004, the business was handed over to the respondent No.5 and
in the year 2008, it was sold to the respondent No.5 was given a due consideration. All that the Assistant Commissioner provides is that “you are
hereby once again informed that as per documentary evidence available with me…….â€, the proprietary business of the dealership was not
transferred to the respondent No.5. It is not known what documents the Assistant Commissioner had with him as the same is not indicated nor there is
any reasoned conclusion arrived by the Assistant Commissioner after considering the reply dated 10.09.2014 that the documents relied upon by the
petitioner therein are unacceptable.
It is also noticed that in the earlier demand notice dated 28.08.2014 also the Assistant Commissioner had similarly provided that “as per the
records/documentary evidence available with me…….â€, the proprietary business was not transferred to the respondent No.5. If the Assistant
Commissioner had any document in his possession and he relies upon the same, it is required to be clearly stated and by merely writing a line that as
per documents available with him, he is of the view that there is no transfer of the business cannot be accepted in the present form.
As it is the stated case of the petitioner that the business of the dealership was initially handed over to the respondent No.5 through a Power of
Attorney of 2004 and thereafter the business was sold to the respondent No.5 by a sale deed of 2008, this Court deems it appropriate that the
authorities in the Tax department arrive at a reasoned conclusion as to whether the business was actually transferred or it was not transferred. In the
absence of any definite conclusion, repeated issuance of the demand notice to the present petitioner would be arbitrary. Accordingly, the two demand
notice dated 28.08.2014 and 19.09.2014 are set aside.
The respondents in the Tax department through the Assistant Commissioner of Taxes, Golaghat shall give a consideration to the reply of the
petitioner dated 10.09.2014 and also give him a personal hearing and allow him to produce any further material that he may desire to produce to
establish that the dealership business was transferred to the respondent No.5. In the same process, the Assistant Commissioner shall also give an
opportunity of hearing to the respondent No.5 and allow him to produce any material that he may desire to produce to substantiate that the dealership
business was not transferred to him.
Upon giving a hearing to both the parties, the Assistant Commissioner shall arrive at a reasoned conclusion as to whether the business was
transferred by the petitioner to the respondent No.5 or not. In the event the Assistant Commissioner arrives at a conclusion that it was not transferred,
the earlier demand notices of 28.08.2014 and 19.09.2014 shall stand revived. On the other hand, in the event the Assistant Commissioner arrives at a
conclusion that the business was actually transferred by the petitioner to the respondent No.5, the Assistant Commissioner shall arrive at its own
decision as regards how to proceed further in the matter and from whom the tax is required to be realized.
The aforesaid exercise be carried out by the Assistant Commissioner of Taxes, Golaghat within a period of three months from the date of receipt
of a certified copy of this order. However, if the petitioner does not appear before the Assistant Commissioner within a period of three weeks from
today, the demand notices dated 28.08.2014 and 19.09.2014 shall stand revived. In terms of the above, the writ petition stands disposed of.