2003 (12) TMI 613 - HC - VAT and Sales Tax

Summary

Issues:
- Pending appeal before State Appellate Forum against order for exemption from sales tax
- Attachment of petitioner's properties for non-payment of sales tax
- Dismissal of application for tax deferment by S.L.C.
- Proper course of action for the State in recovering tax

Analysis:
The petitioner's case revolves around the pending appeal before the State Appellate Forum regarding the exemption from sales tax on goods manufactured in their industrial unit. Despite this appeal, the sales tax authorities have attached the petitioner's properties for non-payment of sales tax. The petitioner argues that the State should not recover the tax until the appeal is decided. The court emphasizes the importance of expeditiously deciding appeals to provide clarity to taxpayers regarding their tax liabilities. The judge directs the State Appellate Forum to decide the appeal within six months to avoid keeping the petitioner in uncertainty.

Regarding the dismissal of the petitioner's application for tax deferment by the State Level Committee (S.L.C.), the court acknowledges the need for a prompt resolution to prevent undue hardship on the petitioner. The judge cites a previous case to support the view that the decision in the appeal will determine the petitioner's tax liability. The court instructs the petitioner not to transfer or encumber their properties and to provide security to the Commercial Tax Officer to safeguard the tax liability amount. The petitioner must also give a written undertaking to abide by the appellate authority's decision and deposit the tax liability if the decision goes against them.

The judgment emphasizes that the appellate authority must decide the appeal solely on its merits and without influence from the court's observations. During the appeal process, the operation of the demand notice for tax payment remains suspended, but the petitioner's property specified in the notice stays under attachment. The court concludes by issuing directions for the petitioner to follow until the appeal is resolved, ensuring compliance with the tax obligations based on the appellate decision.