1992 (7) TMI 326 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether a dealer can resile from paying tax under a lump sum scheme after opting for it.
2. Validity of the petitioner's request to withdraw the application for lump sum tax payment.
3. Interpretation of Section 7-D of the U.P. Sales Tax Act regarding the dealer's liability to pay tax under the scheme.
4. Applicability of the decision in M/s. Jaya Bhatta Udyog case to the present case.
5. The binding nature of the agreement once a dealer opts for lump sum tax payment.

Analysis:
The petitioner, a brick manufacturer, sought a writ of mandamus to prevent tax recovery for a specific period, claiming non-operation of the brick-kiln and no sales during that time. The petitioner had applied for lump sum tax payment under Section 7-D of the U.P. Sales Tax Act for the period in question. Despite later requesting withdrawal of the application, it was denied as the scheme did not allow withdrawal once applied. The petitioner challenged the recovery of the tax amount, arguing against the liability due to no turnover. The court considered whether a dealer could backtrack from the scheme after opting for it, emphasizing the binding nature of the agreement under Section 7-D and the terms agreed upon.

In a previous case, M/s. Jaya Bhatta Udyog v. State of U.P., a Division Bench held that once a dealer opts for lump sum tax payment, they cannot claim non-liability based on actual turnover. The court highlighted that the agreement's terms, including a clause prohibiting reduced payments or withdrawal, regulate the dealer's rights entirely. Consequently, the petitioner in the present case was not entitled to relief based on this precedent. The court dismissed the writ petition, stating that the petitioner's argument regarding the non-binding nature of the offer for lump sum tax payment was a factual issue that should be addressed before the appropriate authority or forum, such as the Commissioner of Sales Tax, U.P., Lucknow.

Ultimately, the court upheld the decision to dismiss the writ petition, with no costs awarded. The petitioner was advised to seek redress through the appropriate channels if desired, but the current petition did not warrant relief based on the legal principles and precedents discussed.