“Revenue To The State Is To Be Protected”: Madras HC Rebukes The Tax Department For Delayed Recovery And High Corruption

CASE BACKGROUND

• In this case, a notice was issued to the petitioner for the recovery of tax with respect to some property he purchased in 2006.
• He was, however, unaware of any sort of impediment when had made the purchase.
• The defaulter, who in this present case is the seller, had also not paid the tax which was applicable for 2000 till 2002.
• The petitioner pledged he was a bona fide purchaser and that his interests ought to be protected.

CASE OBSERVATIONS

• Since the sales taxes arrears were due for about eleven years, the petitioner then further stated that the respected authorities had failed to initiate action for the recovery of sale tax arrears within a period of practical time, and hence the impugned notice is liable to be set aside.
• The counsel, on behalf of the respondents, submitted that several orders were issued to the seller, but they received no response.
• Hon’ble Justice Subrimaniam noticed that there was an ongoing practice of actions which either not initiated or initiated very late allowing the lapse of legality.
• He further said that the loss of revenue to the State was the loss of the public at large and these monetary loses cannot be compensated or recovered properly and therefore, asked more care to be duly taken.

RECENT DEVELOPMENTS

• The authorities were asked to issue all orders to similar cases and identify where actions were not taken or taken after the appropriate period of time had passed.
• Accordingly, the needful action is also to be taken on authorities and officials who were responsible for the accounts of such negligent lapses.
• The Department of Vigilance and Anti-Corruption should co-ordinate with the concerned and responsible officials to conduct frequent raids to control such menace activities.

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