1994 (4) TMI 362 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Validity of notices issued under Section 14 of the Karnataka Sales Tax Act, 1957.
2. Obligation of the second respondent to make payments under Section 14(5) of the Act.
3. Requirement of a provisional assessment order under Section 12B(2) of the Act.

Issue-wise Detailed Analysis:

1. Validity of Notices Issued Under Section 14 of the Karnataka Sales Tax Act, 1957:
The petitioner contested the validity of notices issued by the first respondent under Section 14 of the Karnataka Sales Tax Act, 1957, arguing that the notices were issued without a provisional assessment order as required under Section 12B(2). The court noted that the petitioner had submitted monthly statements under Section 12B(1) along with cheques for advance tax, which were dishonored. The court held that the amount covered by the dishonored cheques is deemed to be an amount due under the Act for the purposes of Section 13. Therefore, the first respondent was justified in initiating recovery proceedings under Section 14.

2. Obligation of the Second Respondent to Make Payments Under Section 14(5) of the Act:
The second respondent, in response to the notices (annexures A and B), asserted that no amount was due to the petitioner as per their business terms at the time of receiving the notices. Section 14(5) of the Act states that if the person to whom the notice is sent objects on the ground that no sum is due to the dealer, then such person is not required to pay the sum demanded. Given this assertion by the second respondent, the court concluded that the second respondent is not obliged to make any payment as demanded by the first respondent.

3. Requirement of a Provisional Assessment Order Under Section 12B(2) of the Act:
The petitioner argued that without a provisional assessment order under Section 12B(2), the authorities could not demand or collect tax. The court clarified that Section 12B(1) requires the dealer to send monthly statements and pay the tax in advance, and the amount so payable is deemed to be an amount due under the Act. The court found that the assessing authority did not consider the statements filed by the petitioner to be incorrect or incomplete, and thus, there was no need for a provisional assessment order. The court held that the amount covered by the dishonored cheques is deemed to be an amount due, and the first respondent was justified in invoking Section 14 for recovery.

Conclusion:
The court dismissed the writ petition, holding that the notices issued under Section 14 were valid and that the second respondent was not obliged to make any payment as per Section 14(5). The court also concluded that a provisional assessment order under Section 12B(2) was not required for the recovery of the amount due. The petitioner was found to have no merit in their arguments, and the rule was discharged with no costs.