2001 (3) TMI 977 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of sales tax due and payable by the petitioners to the State of Bihar.
2. Denial of "consolidated registration" under sub-rule (4) of rule 3 of the Bihar Sales Tax Rules, 1983.
3. Challenge to the orders of the Commercial Taxes Tribunal and the Commissioner of Commercial Taxes.
4. Allegations of malpractices and unfair means by the petitioners.
5. Non-payment of admitted tax dues by the petitioners.

Detailed Analysis:

1. Legality of Sales Tax Due and Payable:
The petitioners argued that no sales tax was "legally" due, whereas the State of Bihar contended that the taxes were due, collected, retained, but not deposited. The court noted that the petitioners did not satisfactorily address the issue of tax liability and seemed to be attempting to delay payment through legal maneuvers.

2. Denial of "Consolidated Registration":
The petitioners sought "consolidated registration" under sub-rule (4) of rule 3 of the Bihar Sales Tax Rules, 1983, claiming it was their right due to their business operations across multiple locations. The court clarified that the law permits "consolidated returns" under sub-rule (10) of rule 7, not "consolidated registration." The court emphasized that the petitioners misunderstood the provisions, as the law allows for consolidated returns at the discretion of the Commissioner, not as a right.

3. Challenge to the Orders of the Commercial Taxes Tribunal and the Commissioner of Commercial Taxes:
The petitioners challenged the orders dated April 13, 1999, and February 16, 1999, respectively. The Tribunal's decision was based on the petitioners' failure to maintain separate accounts for different branches and allegations of malpractices. The court upheld the Tribunal's decision, stating that the refusal of "consolidated registration" was justified due to the petitioners' non-compliance with accounting requirements and the potential for tax evasion.

4. Allegations of Malpractices and Unfair Means:
The Tribunal and the Commissioner cited malpractices and unfair means by the petitioners, including pressure on tax authorities and failure to maintain proper accounts. The court noted that the Commissioner, as the administrative head, had access to confidential information that justified his decision. The court found no merit in the petitioners' arguments against these allegations.

5. Non-payment of Admitted Tax Dues:
The State's counter-affidavit revealed significant unpaid sales tax amounts by the petitioners, with only a minimal amount paid after the filing of the writ petition. The court observed that the petitioners did not adequately respond to these allegations and failed to comply with previous court orders to deposit the tax. The court emphasized that the stay order provided only temporary relief and did not absolve the petitioners of their tax liabilities.

Conclusion:
The court dismissed both petitions with costs, concluding that the State of Bihar was justified in denying "consolidated registration" and refusing the indulgence of filing consolidated returns. The court found no error in the Tribunal's decision, given the petitioners' non-compliance with tax regulations and allegations of malpractices. The court also noted the petitioners' failure to address the issue of unpaid taxes adequately.