HC raps UP commercial tax deptt for withdrawing nearly 50

The Allahabad High Court has criticized Uttar Pradesh Commercial Tax Department for withdrawing nearly Rs 50 crore from the bank account of e-commerce giant Flipkart "through dubious means by passing ex-parte assessment orders" and directed it to pay a cost of Rs 2 lakh to the company and refund the withdrawn amount with interest.
Passing the order on February 29 last, a division bench, comprising Justice Tarun Agarwala and Justice Vinod Kumar Mishra, observed that "if in this cavalier fashion the commercial tax department functions and withdraws huge sums of money without valid service (of notice), it would be difficult for big business houses to carry on their businesses.

Such business houses will be forced to shift their business outside the state, it said.
Terming as "wholly illegal and without any authority of law" a notice dated 27.01.2016, which was followed by withdrawal of Rs 49.82 crore from the company's bank account, the court quashed the same besides setting aside another order passed by the department on 11.2.2016 whereby a recall application filed by Flipkart had been rejected.
The court also directed the concerned Deputy Commissioner of Commercial Tax to refund the amount with interest "within two weeks of from the date of production of a certified copy of this order", observing that "since a huge amount" had been withdrawn from the petitioner's bank account "the respondents are not justified to retain this amount any further".

The court, however, added "it would be open to the assessing authority to make a fresh assessment in accordance with law after proper service of the notice upon the petitioner and after giving them an opportunity of hearing".
The court also said "it would be open to the Commercial Tax Commissioner, Lucknow, to institute an inquiry and fix responsibility on the erring officer".