1965 (3) TMI 60 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the assessment order and refund of advance tax for the year 1955-56.
2. Refund of excess amounts paid for the years 1956-57 and 1957-58.
3. Imposition of penalty and subsequent payment arrangements.
4. Variation of payment plan by the Collector and violation of natural justice principles.

Analysis:

1. The petitioner challenged the assessment order for the year 1955-56, arguing that on setting aside the order, no liability to pay sales tax remained, entitling them to a refund of the advance tax paid. The court held that the liability to tax was created by the Sales Tax Act, not the assessment order. The existence of the original assessment order revived upon setting aside the appellate order, rendering the petitioner ineligible for a refund. The court deemed the question of refund between the appellate and revision orders as academic.

2. For the years 1956-57 and 1957-58, the petitioner sought refunds of excess amounts paid due to pending appeals. The court noted the assessment orders determining the liabilities and subsequent payment arrangements made with the Collector. The petitioner stopped further payments, leading to penalties imposed. The Collector later varied the payment plan, demanding immediate payment to avoid coercive processes. The court analyzed the petitioner's arguments regarding the binding nature of the initial payment arrangement and found it void and unenforceable under Article 299(1) of the Constitution.

3. The imposition of penalties and subsequent payment arrangements were scrutinized by the court. The petitioner's cessation of payments led to penalties and revised payment demands by the Collector. The court examined the legality of the Collector's actions and the petitioner's contentions, ultimately dismissing the petition due to the void nature of the initial payment arrangement and the Collector's authority to demand immediate payments.

4. The petitioner contended that the variation of the payment plan violated principles of natural justice. The court found that the petitioner had been heard in the matter before subsequent orders were passed, negating the argument of a violation of natural justice. The court also clarified the applicability of Order XX, rule 11(2) of the Civil Procedure Code to the recovery proceedings, ultimately dismissing the petition without costs.

In conclusion, the court dismissed the petition, upholding the Collector's authority to demand immediate payments and rejecting the petitioner's claims for refunds and challenges to the payment arrangements.