1995 (10) TMI 213 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to the action of the respondents in seeking tax recovery, compliance with section 17-B of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis:
The petitioner sought a writ to declare the respondents' actions in recovering tax as illegal and arbitrary. The attachments were made under section 17-B of the Act, with the approval of the Commissioner of Commercial Taxes. The Court found that the requirements of section 17-B were not complied with in this case. The provision allows provisional attachment of property during pending assessments to protect revenue. It mandates the assessing authority to form an opinion, obtain approval from the Commissioner, and attach property belonging to the assessee. However, in this case, the assessing authority did not form an opinion, and the attachments were made without proper approval. The Court noted that the attachments were in violation of section 17-B and ordered their removal.

The Court highlighted that the Deputy Commissioner sought approval for attachments, not the assessing authority. The Commissioner approved the attachments without the assessing authority forming an opinion. Additionally, instructions were issued to stop payment to the petitioner before approval was granted. These actions were deemed to be in flagrant violation of the Act. The Court acknowledged the petitioner's willingness to provide a bank guarantee to cover the attachment value. Consequently, the Court directed the respondents to release the attachments upon the petitioner furnishing a bank guarantee of Rs. 5,00,000 within fifteen days, valid until assessments are finalized.

In conclusion, the writ petition was allowed, and the attachments were ordered to be lifted. The Court emphasized the importance of compliance with statutory provisions and set aside the illegal attachments made by the respondents.