1991 (6) TMI 246 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of tax under the Orissa Sales Tax Act, 1947 and Orissa Additional Sales Tax Rules, 1975, including penalty.
2. Challenge of appellate order before the Orissa Sales Tax Tribunal.
3. Stay of realization of tax and payment made by the petitioner.
4. Dispute regarding deductions for labor and service charges.
5. Interpretation of provisions related to the attachment of assets for non-payment of tax.
6. Requirement of issuing a revised notice of demand in case of variation in the quantum of assessment.

Analysis:

1. The petitioner, a contractor, was assessed to tax under the Orissa Sales Tax Act and Additional Sales Tax Rules, with a penalty included. The demand was reduced on appeal, but a further dispute arose during the second appeal regarding the stay of tax realization. The revisional authority directed a payment to vacate the attachment made under the Act.

2. The petitioner claimed that the assessment did not consider reasonable deductions for labor and service charges, along with taxes already paid on materials supplied by principals. The department argued that in the absence of evidence for deductions, estimates were justified. The court considered the facts and directed the petitioner to pay a specific sum against the disputed demand.

3. A dispute arose regarding the inoperativeness of the attachment under section 13-A(1) upon granting time for payment. The court analyzed the relevant provisions and clarified that the special mode of recovery is not applicable when the payment date is extended by the authority, emphasizing that a person cannot be termed a defaulter during the extended period.

4. The petitioner contended that no notice was issued as required by the rules after a reduction in the tax assessment, challenging the action under section 13-A(1). The court held that in the absence of clear material, the issue was not delved into, but emphasized the necessity of issuing a revised notice of demand in case of a variation in the assessment amount.

5. Ultimately, the court vacated the notice of attachment, deeming it unsustainable in law, and disposed of the writ application and related case accordingly. The judgment clarified the legal interpretation of provisions related to tax assessment, payment, and attachment of assets, providing a comprehensive analysis of the issues raised by the parties.