Aishwarya Rathore –

Published on August 25, 2021, at 13:41 IST

The Supreme Court overturned the Punjab and Haryana High Court ruling that stayed recovery of money in connection with multi-crore Value Added Tax (VAT) evasion against 47 companies.

The Hon’ble Court issued the orders while hearing the Special Leave Petition (SLP) filed by Union Territory Administration challenging the High Court’s decision on August 13.

The Apex Court observed, “Entertaining the petition under Article 226 overreaches the jurisdiction of this Court. The pendency of the earlier proceedings was brought to the notice of the High Court since it has been referred to in the impugned order. The High Court should have deferred to the proceedings pending before this Court.”

In 2019, a total of 47 firms were detected as evading multi-crore VAT by failing to file annual statements as required by Rule 40 of the Punjab Value Added Tax Rules, 2005.

In February 2020, these firms received a stay notice from the Punjab and Haryana High Court on the previously issued notices.

Against the decision of the Punjab and Haryana High Court, the Union Territory Administration filed a Special Leave Petition in the Apex Court, which initiated a pause on the stay orders of the High Court.

The Apex Court accordingly allowed the appeal and set aside the impugned order of the High Court dated 1 March.

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