1994 (1) TMI 259 - HC - VAT and Sales Tax

Summary

Issues:
Abuse of process of the court in a sales tax exemption case.

Analysis:
The petitioner, a small-scale industrial unit, was granted sales tax exemption totaling Rs. 3,18,149 for the period from January 1, 1981, to December 31, 1985. Assessments were completed for the years in question, with a dispute arising for the year 1983-84. The Appellate Assistant Commissioner partially allowed the appeal, reducing the taxable turnover by Rs. 33,219.71, resulting in a tax reduction of only Rs. 1,993.20. Despite being entitled to exemptions for the specified period, the petitioner was found liable to pay tax for the year 1985-86. A notice was issued for payment, which the petitioner objected to without substantial grounds. Subsequently, a corrected notice was issued, reducing the tax payable to Rs. 46,827. The petitioner, however, challenged the demand incorrectly, leading to a stay order for a reduced amount of Rs. 20,000, despite owing a total of Rs. 53,294. The petitioner's contentions were found baseless, and the court deemed the petition an abuse of process.

The petitioner's sole contention was the non-implementation of a specific order, Ex. P2. The Government Pleader filed an affidavit confirming compliance with Ex. P2. The court found no merit in the petitioner's objections to the demand made under Ex. P5. The court noted the lack of substance in the petitioner's case and the filing of the petition on incorrect premises to avoid revenue recovery proceedings. Despite the petitioner's claims, the court determined that even if Ex. P2 were not implemented, the reduction in the payable amount would be minimal. The court concluded that the petitioner's actions were in bad faith, leading to a dismissal of the petition and an order for the petitioner to pay costs of Rs. 2,500 to the respondents.

In summary, the court found the petitioner's actions to be an abuse of the court's process, lacking in bona fides, and aimed at stalling legitimate revenue recovery proceedings. The court dismissed the petition, ordered the petitioner to pay costs, and directed the respondents to proceed with recovering the outstanding amount due from the petitioner.