HC directs ETO to refund Rs 3 lakh to company

Saurabh Malik

Tribune News Service

Chandigarh, July 13

Eager to meet targets at the end of financial year, Excise & Taxation Officer, Mobile Wing, Ludhiana, took two cheques of Rs 3 lakh each from a firm without any assessment before encashing these in discharge of anticipated liability.

Taking serious note of the “arbitrariness and highhandedness”, the Punjab and Haryana High Court has not only passed strictures, but also directed refund of the amount. Directions were also issued to recover Rs 10,000 from the officer for his arbitrary action.

The directions by the Division Bench of Acting Chief Justice Shiavax Jal Vazifdar and Justice GS Sandhawalia came on a petition filed by Sumit Agencies against the State of Punjab and other respondents.

The petitioners, through counsel Aman Bansal, had challenged the Taxation Officer’s action of taking two cheques without liability and notice. Directions were sought for ordering an independent and impartial inquiry on the ground that cheques could not have been taken in the absence of liability. The petitioner told the court that it was engaged in the business of supplying cigarette, biddi, pan masala etc. The firm was duly registered under the Punjab Value Added Tax Act, 2005, but was not a defaulter.

The officer came to the firm’s premises on February 16 and demanded exorbitant amounts after threatening it. The cheques were taken “under the threat of coercion on account of completion of target of revenue before March 31. The officer even took the petitioner’s signatures on blank papers before encashing one of the cheques. Taking up the matter, the Bench asserted: “The procedure smacks of arbitrariness and highhandedness of the authorities on the face of the record itself, which cannot be appreciated, in any manner. Before parting with the orders, the Bench directed the respondents to refund Rs 3,10,000. The assessment proceedings were also directed to be conducted by an officer not associated with the inspection.