1989 (12) TMI 339 - HC - VAT and Sales Tax

Summary

Issues: Challenge to Rule 31 of Tamil Nadu General Sales Tax Rules, 1959; Interpretation of security provision; Stay application before appellate authority

In the judgment delivered by the High Court of Madras, the petitioner challenged Rule 31 of the Tamil Nadu General Sales Tax Rules, 1959, which pertains to the furnishing of security for the payment of tax, fee, or other amounts. The rule mandates the appellant or applicant to provide personal or property security, along with a security bond or a bank guarantee as directed by the appellate authority. The petitioner contended that the security should be to the satisfaction of the assessing authority, but the court held that Section 31(5) of the Tamil Nadu General Sales Tax Act, 1959, specifies that the security is to be to the satisfaction of the appellate authority, not the assessing authority. Thus, the petitioner's argument was deemed misconceived.

Regarding the stay application and appeal before the appellate authority, the court directed the authority to dispose of the stay application within four weeks from the judgment date. Until the disposal of the stay application, there was a stay on the collection of the disputed tax from the petitioner as per the assessment order. Consequently, the writ petition challenging Rule 31 was dismissed by the court.