1997 (12) TMI 601 - HC - VAT and Sales Tax

Summary

Issues involved: Challenge to the action of officials in collecting post-dated cheques towards tax without proper assessment or following due procedure.

Summary:
The High Court of Andhra Pradesh heard writ petitions challenging the actions of officials from the Vigilance and Enforcement Department and officers of the Intelligence Wing of the Commercial Tax Department in collecting post-dated cheques from business premises without proper assessment. The petitioners alleged that the cheques were collected under pressure or coercion without following the due procedure for assessment. The respondents claimed that the cheques were voluntarily given by the petitioners after suppression of turnovers was found during inspection. However, the Court expressed doubts regarding the voluntary nature of the cheques collection, indicating possible pressure tactics. The Court emphasized that tax collection should follow the procedure sanctioned by law, including sending statements to the assessing officer for necessary assessments. The Court referred to a previous case deprecating similar practices. Interim directions were given not to encash the cheques, and the Court ordered the cheques to be returned to the petitioners, while also noting the possibility of suppressed turnovers. The respondents were directed to take proper steps for assessment, including issuing notices, calling for accounts, and initiating penalty proceedings if necessary. The petitioners were instructed to pay the tax demanded subject to their right of appeal.

The writ petitions were disposed of accordingly.