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PDS Legal and Allahabad HC save Flipkart from 'dubious' UP tax dept that spirited away its bank account funds

PDS Legal won Rs 49.82 crore Value Added Tax (VAT) relief for Flipkart in the Allahabad high court which ordered the Uttar Pradesh VAT department to refund that amount to Flipkart, with interest, and also ordered the department’s concerned tax officer to pay Rs 2 lakh, in litigation cost, to the e-commerce giant.

PDS Delhi partner Tarun Gulati and principal associate Kishore Kunal acted for Flipkart from whose bank account the UP VAT department had illegally withdrawn Rs 49.82 crore towards tax dues, after passing assessment and attachment orders without issuing notice to Flipkart.

Ordering a refund of the amount, along with interest, a bench of justices Vinod Kumar Misra and Tarun Agarwala ruled:

“[…] deliberate attempt was made by the Respondents to withdraw the money from the Petitioner’s bank account through dubious means by passing ex-parte assessment orders and not allowing to be served validly on the Petitioner.”

Observing that the method of the tax department in this case was “dubious” the bench added:

“If in the cavalier fashion the Commercial Tax Department functions and withdraws huge sums of money without valid service, it would be difficult for big business houses to carry on their business.”

“such business houses would be forced to shift their businesses outside the State of Uttar Pradesh.”

The UP commercial tax department had withdrawn money from the accounts of Flipkart without notice, for the second time in this case. The first instance was when it withdrew Rs 27 crore in a similar manner for VAT dues of three years, reported the Economic Times.

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