TRLA holding Ltd vs Custom Excise & Vat
Background :
The petitioner, a businessman dealing in various washing and detergent products in Bangladesh, was suspected of evading VAT taxes. A team of customs officers conducted a search at the petitioner’s factory and found discrepancies in the VAT payments. It was revealed that the factory had evaded a significant amount of VAT over a period of time. Consequently, the authorities issued a demand notice for payment of the evaded VAT and initiated legal proceedings against the petitioner under the VAT Act of 1991. It was found that from 1-11-1998 to 13-10-2001 the factory without paying VAT on the produced to the tune of Taka 13,21,03,373.35 made delivery thereof evading the VAT on such produced of Taka 1,98,15,505.75 for which the authority under the provision of section 55(1) of the VAT Act 1991 served demand notice upon the petitioner for payment of Taka 1,98,15,505.75 to the Governmest treasury challan and in the meantime filed a case against the petitioners company under section 62) 31, 32, 35, of the VAT Act, 1991 read with role 34 and 42 of the VAT Rules.
Issue: Whether the inspection carried out by the officers was within their jurisdiction or not?
Argument: The petitioner’s counsel argues that the VAT authority’s actions, based on alleged forged documents, were illegal and lacked jurisdiction, as affirmed by the Excise VAT Appellate Tribunal. They cite a precedent to support their claim. However, the Assistant Attorney-General contends that the VAT authority’s actions were in compliance with the law, citing section 26 of the VAT Act. They argue that the petitioner’s evasion of VAT was discovered through proper procedure, and therefore, the Rule should be discharged. The learned Counsel for the petitioner argued that the authority disregarded Section 26 of the VAT Act 1991 when they apprehended the petitioner’s factory premises, seized necessary documents, and claimed VAT evasion. The petitioner’s Counsel emphasized that the authority’s actions were unjustified based on Section 26 it was before amendment..
Judgement: In this case, where a petitioner raised concerns about the actions of Value Added Tax (VAT) authorities. However, the court found that while there were procedural errors, there wasn’t a fundamental illegality that warranted the court’s intervention. The court noted that the inquiry followed the guidelines provided by a Preventive Officer and that the VAT authorities followed the protocols outlined in Section 26 of the VAT Act. As a result, the court discharged the rule, meaning it dismissed the petitioner’s request or claim.
Background : The petitioner, a businessman dealing in various washing and detergent products in Bangladesh, was suspected of evading VAT taxes. A team of customs officers conducted a search at the petitioner’s factory and found discrepancies in the VAT payments. It was revealed that the factory had evaded a significant amount of VAT over a…