1997 (8) TMI 503 - HC - VAT and Sales Tax

Summary

Issues:
- Failure to issue "C" forms due to default in tax payment

Analysis:
The petitioner, a registered company under the Karnataka Sales Tax Act, applied for "C" forms for purchasing materials required in its business. The respondent, Assistant Commissioner of Commercial Taxes, refused to issue the forms citing the petitioner's default in paying an assessed amount under the Entry Tax Act. The court examined the provisions of the Central Sales Tax Act, specifically section 8(4) and rule 12(1), which require a declaration form for the benefit of section 8(1). The court noted that there is no provision empowering the authority to withhold "C" forms solely based on tax arrears. The Karnataka Entry Tax Act provides mechanisms for tax recovery, such as through land revenue or criminal procedure, and does not authorize withholding "C" forms for coercing payment. The court held that the prescribed authority's refusal to issue "C" forms due to tax default is unjustified and amounts to an unauthorized mode of recovery not recognized by the law.

The court emphasized that if the legislature intended withholding "C" forms as a means of tax recovery, it would have explicitly included it in the permissible modes of recovery under the Entry Tax Act. Since section 8(4) does not sanction the authority's actions as a valid recovery method, it is impermissible for them to use it to compel payment. Therefore, the court ruled in favor of the petitioner, directing the respondents to issue the necessary "C" forms as per the petitioner's application within one week. The judgment highlights the importance of adhering to legal provisions and recognized methods of tax recovery, emphasizing that authorities cannot create additional modes of recovery beyond what is prescribed by law.