2007 (3) TMI 672 - SC - VAT and Sales Tax

Sales tax arrears - High Court demanded 50% Tax - Held that - Since there is an order of attachment during the pendency of the Civil Appeal in this Court, the interest of the respondent is fully safeguarded by the said Order - appellant preferred the above appeal in this Court and this Court on 28.11.2005 while ordering notice to the respondent ordered attachment of the property purchased by the appellant shall continue and no further steps will be taken until further orders by this Court. Since there is an order of attachment during the pendency of the Civil Appeal in this Court, the interest of the respondent is fully safeguarded by the said Order. We, therefore, set aside the order passed by the High Court ordering deposit of 50% of the total tax due and request the High Court to dispose of Writ Appeal filed by the appellant on merits - Decided in favour of assessee.

Summary

Issues:
Sales tax arrears of vendee-appellant, validity of assessment order, dispute over tax amount, interim order requiring deposit of 50% of total tax due, attachment order by High Court, appeal challenging interim order.

Analysis:
The case involves sales tax arrears of the vendee-appellant arising from a transaction in 2000, with an assessment order passed in 2004 fixing the total tax due at Rs.83,53,477. A demand notice was issued to the appellant to pay the arrears. The appellant, a bonafide purchaser of the property in question, challenged the assessment through a Writ Appeal pending before the High Court. During the pendency of the appeal, the High Court directed the appellant to deposit 50% of the total tax due within eight weeks, failing which the stay granted would be vacated automatically.

The appellant, aggrieved by the interim order, appealed to the Supreme Court, which ordered the attachment of the purchased property to continue and no further steps to be taken. The Supreme Court set aside the High Court's order requiring the deposit of 50% of the total tax due, emphasizing that the attachment order ensured the respondent's interest was safeguarded. The Supreme Court directed the High Court to dispose of the Writ Appeal on merits and in accordance with the law.

The Supreme Court clarified that the attachment order would remain in force until the disposal of the Writ Appeal, thereby ensuring the respondent's interest. The appeal was disposed of without any costs being awarded. The judgment focused on safeguarding the interests of both parties while allowing the legal process to determine the tax liability in question.