Bombay High Court
Parle Elizabeth Tools Pvt. Ltd vs State Of Maharashtra And Ors on 23 January, 2024
Author: G.S. Patel
Bench: G.S. Patel
918-ASWP-1027-2024.DOC
Sumedh
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 1027 OF 2024
Parle Elizabeth Tools Pvt Ltd ...Petitioner
Versus
The State of Maharashtra & Ors ...Respondents
Ms Anjali Chandurkar, with Mihir Mehta, Mohit Raval i/b PDS
Legal, for the Petitioner.
Mrs Rupali Shinde, AGP, for the Respondent-State.
Mr Vishwanath Patil, for Respondent Nos 2 & 3.
CORAM G.S. Patel &
Kamal Khata, JJ.
DATED: 23rd January 2024
PC:-
1. Heard Ms Chandurkar for the Petitioner and Mr Patil for
Respondent Nos 2 and 3.
2. The challenge is to an impugned notice dated 3rd January
2024 for the Financial Year 2015-16, which is an assessment order,
accompanied by a notice of demand under the Maharashtra
Municipal Corporation (Local Body Tax Rules), 2013. The Petition
proceeds on the footing that the requisite notice under Rule 33(7) in
Form 'H' was never issued. We are told that such a notice was in
fact issued on 16th July 2016 and there is confirmation of receipt.
Digitally
signed by
SUMEDH
SUMEDH NAMDEO
NAMDEO SONAWANE
SONAWANE Date:
10:55:31
+0530 23rd January 2024
918-ASWP-1027-2024.DOC
But Rule 33, which speaks of assessment of local body tax empowers
a Commissioner under sub-rule (3) to assess a registered dealer in
certain circumstances. Sub-rule (7) says that for the purposes inter
alia of sub-rule (3), the assessment of the dealer must be done
within five years from the end of the year to which such assessment
relates by serving on the dealer a notice in Form 'H' and fixing a
date which shall not be earlier than 15 days from the due date of
service thereof.
3. The question is whether the five-year period is for serving
Form 'H', which is one possible interpretation, or whether Form
'H' must be served and the assessment completed in all respects
within the five-year period.
4. It is the submission of Mr Patil on behalf of the Revenue that
Form 'H' was promptly submitted. The Petitioner kept asking for
time. They did not furnish data till at least 2022 and 2023 and hence
the assessment was completed on 3rd January 2024. It is submitted
that on a correct reading of sub-rule (7), the words "may proceed to
assess the dealer within five years" are qualified by the words "by
serving on the dealer a notice in Form 'H'". This means, according
to Mr Patil, that the manner in which the assessment is to be done
for the purposes of sub-rule (7) within the five year period is by
issuance of a Form 'H' notice. Once that notice is shown to have
been completed within that five-year period, no question arises of a
later assessment being beyond time.
23rd January 2024
918-ASWP-1027-2024.DOC
5. This raises the more obvious question as to how long such an
assessment proceeding can then continue. In the present case, we
see that for the FY of 2015-16, ending with 31st March 2016, the
assessment has not been done for eight years although the Form 'H'
was issued in 2016 itself.
6. It is for this reason that Ms Chandurkar submits, and in our
prima facie view, with some justification that it simply cannot be
that once a Form 'H' notice is issued, the period within which the
assessment must be completed can be indefinitely extended or that
time stops running against the Revenue. By necessary extension,
this would mean that an assessment could continue theoretically for
the next two decades so long as the Form 'H' was issued within five
years. In fact, in an extreme case the Form 'H' could be issued one
day before the end of the five-year period and then there would be
no time limit within which the final assessment order was to be
passed. She submits that this could never have been the statutory
intent. The words, "by serving on the dealer in a notice in Form
'H'" are only a prescription of the manner in which the assessment
must start or be triggered.
7. It seems that on the basis of this impugned order, the 2nd
Respondent has written to the branch manager of HDFC Bank,
Evershine Branch, Vasai (East) in Form '1' under Rule 42
demanding that there be a payout of Rs 1,38,01,155/- from the
Petitioner's Account No. CC00382790000091, by a pay order in
favour of the Corporation A/c Local Body Tax before 7th February
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918-ASWP-1027-2024.DOC
2024. Consequently, the HDFC Bank has stopped all operations on
that cash credit account.
8. Prima facie we are not satisfied that the mere service of Form
'H' will indefinitely extend time for completion of an assessment.
We will have to consider the rival submissions on both sides.
9. Rule.
10. We require the Petitioner to file before Thursday, i.e., 25th
January, a written undertaking of an authorised director of the
Petitioner to pay the entire amount, if the Petition fails, to the Vasai
Virar City Municipal Corporation ("VVCMC").
11. In the meantime, and having regard to a prima facie view, and
subject to the filing of the undertaking, we grant ad-interim relief by
directing the VVCMC to immediately communicate to the HDFC
Bank, Evershine Branch, Vasai (East) not to act upon its previous
instructions.
12. We note that the HDFC Bank is not joined as a party to this
Petition. It needs to be formally joined. Leave to amend to join
HDFC Bank as Respondent No 4. Given the urgency, we direct
HDFC Bank, Evershine Branch, Vasai (East) to act upon an
authenticated copy of this order and not to debit the cash credit
account of the Petitioner by the amount of the pay order/demand
draft or any other instrument or by electronic transfer and to permit
routine operations in the ordinary and usual course of business until
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918-ASWP-1027-2024.DOC
further orders of this Court. The HDFC Bank is also not to permit
closure of the cash credit account without an order of this Court.
13. We propose to dispose of the Petition finally at the stage of
admission after hearing both sides to the extent necessary in
considering the relevant judgments and statutes. Affidavit in Reply
by Respondent No 2 to be filed and served by 5th February 2024.
No rejoinder without leave of the Court.
14. List the Petition on 9th February 2024.
(Kamal Khata, J) (G. S. Patel, J)
23rd January 2024
