1994 (4) TMI 363 - HC - VAT and Sales Tax

Summary

Issues:
Seizure of goods and dispossession from the shop under Rajasthan Sales Tax Act, 1954; Validity of demand notice and assessment order; Proper service of notice and order; Acceptance of money from a third party; Action of the respondents declared illegal; Imposition of cost on the respondents.

Analysis:
The petitioner, a dealer under the Rajasthan Sales Tax Act, challenged the seizure of goods and dispossession from the shop by the respondents on March 31, 1993. The petitioner claimed to have paid the sales tax due for the years 1986-88 and disputed any outstanding amount for the period 1982-86. The respondents contended that due to the petitioner's failure to deposit the demand, action was taken under section 11 of the Act. However, it was revealed that the service of the assessment order and demand notice on the surety was invalid, and the petitioner had not received the demand notice, as evidenced by the record. The court found the respondents negligent in ensuring proper service and noted the inactivity of the assessing authority leading to the coercive step taken on March 31, 1993.

The court highlighted that the respondents should not have accepted money from a third party and directed the refund of the amount paid by the landlord. It was emphasized that the respondents acted improperly by treating the amount as security in the proceedings dated July 28, 1993. The court deemed the actions of the respondents illegal due to the lack of valid service of the assessment order and demand notice. Consequently, a cost of Rs. 2,000 was imposed on the respondents, recoverable from the responsible officers for the improper service and attachment of the shop without verifying the facts.

In conclusion, the court allowed the writ petition, declaring the actions of the respondents as illegal. The judgment highlighted the importance of proper service of notices and orders, as well as the prohibition on accepting money from unauthorized sources. The imposition of costs aimed to hold the responsible officers accountable for their actions, emphasizing the need for adherence to legal procedures and due diligence in tax-related matters.