1968 (7) TMI 48 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the validity of item 7 of the Second Schedule to the Madras General Sales Tax Act, 1959.
2. Issuance of notice demanding security during the pendency of writ petitions challenging tax provisions.
3. Allegation of contempt of court by the respondents for taking action contrary to the interim order of stay.
4. Consideration of the unconditional apology tendered by the respondents and the need for further action.

Analysis:
1. The petitioner filed writ petitions challenging the validity of item 7 of the Second Schedule to the Madras General Sales Tax Act, 1959, seeking prohibition of assessment proceedings for the years 1967-68 and 1968-69. An interim order of stay was granted by the court, restraining enforcement of the provisions of item 7. The respondents demanded security from the petitioner citing provisions of the Act, leading to a dispute regarding the legality of such action during the pendency of the writ petitions.

2. The respondents' notice demanding security from the petitioner, despite the court's stay order, raised concerns of contempt of court. The court found that the notice contravened the stay order by insisting on tax liability based on the challenged provisions. The respondents contended that their actions were not intended to disobey the court's orders but were based on a mistaken belief. However, the court emphasized that officials must not act contrary to court orders and highlighted the importance of upholding the rule of law.

3. The respondents tendered an unconditional apology for their actions, acknowledging their mistake and expressing regret for any contempt of court. The court considered the apology and the circumstances surrounding the issuance of the notice. While noting the absence of malicious intent, the court emphasized the need for officials to respect court orders and refrain from independently assessing the validity of judicial decisions. Ultimately, the court accepted the apology and decided not to pursue further action against the respondents.

4. In conclusion, the court emphasized the fundamental principle that no government official should unilaterally challenge or act against court orders. The judgment underscored the significance of upholding the rule of law and the proper channels for addressing legal disputes. The court accepted the respondents' apology in this case but warned against similar actions in the future, emphasizing the importance of respecting judicial decisions and due process in a democratic society.