1990 (9) TMI 326 - AT - VAT and Sales Tax

Summary

Issues Involved:
1. Withholding of declaration forms for non-payment of assessed interest.
2. Refusal to issue sales tax clearance certificate due to unpaid interest dues.
3. Validity of the applicant's stay petition for the realization of interest dues.

Issue-wise Detailed Analysis:

1. Withholding of Declaration Forms for Non-Payment of Assessed Interest:
The applicant, Messrs. M.L. Dalmiya & Co. Ltd., contended that the Commercial Tax Officer unjustly withheld declaration forms due to non-payment of assessed interest for the years 1983-84 and 1984-85. The applicant argued that there is no statutory provision allowing withholding of declaration forms for non-payment of such dues once they are assessed and determined. The relevant rule, 27AA of the Bengal Sales Tax Rules, 1941, was cited, indicating that withholding is permissible only for pre-assessment defaults. The Tribunal agreed with the applicant, noting that the determination of interest under section 11(2h) of the Act is akin to an assessment, and once assessed, the interest dues should be collected through certificate proceedings rather than withholding declaration forms. The Tribunal concluded that the Commercial Tax Officer exceeded his authority by withholding the forms based on assessed dues, thus allowing the applicant's prayer for the issuance of declaration forms.

2. Refusal to Issue Sales Tax Clearance Certificate Due to Unpaid Interest Dues:
The applicant also sought a sales tax clearance certificate, which was denied by the Commercial Tax Officer on the grounds of unpaid interest dues. The Tribunal examined section 21B of the Act and rule 84A of the Rules, which state that a clearance certificate can only be issued if the applicant has paid or made satisfactory provision for all existing liabilities. Since the applicant had not paid the interest dues, the Tribunal found that the Commercial Tax Officer was justified in withholding the clearance certificate. Consequently, the applicant's request for the issuance of the sales tax clearance certificate was rejected.

3. Validity of the Applicant's Stay Petition for the Realization of Interest Dues:
The applicant claimed that his stay petition for the realization of interest dues was not entertained due to amendments in rule 75 of the Rules, which required simultaneous filing of the appeal and stay application. The Tribunal noted that the appeals were filed before the rule change, and the applicant argued that the new rule should not apply retrospectively. However, the Tribunal was not convinced by this argument, stating that there was nothing in the old rule preventing the applicant from filing a stay petition earlier. The Tribunal emphasized that it was prudent to seek a stay order at the earliest opportunity. Since the stay petition was filed much later, the Tribunal rejected the applicant's request to direct the respondents to entertain the stay petition at this stage.

Conclusion:
The Tribunal allowed the application in part, directing the issuance of declaration forms as withholding them for non-payment of assessed dues was not warranted by law. However, the request for a sales tax clearance certificate was denied due to the applicant's existing unpaid interest liabilities. The application was thus disposed of with no order for costs. All members of the Tribunal concurred with the judgment.