2006 (1) TMI 575 - HC - VAT and Sales Tax

Summary

Issues:
1. Justification of recoveries ordered against sureties.

Analysis:
The High Court addressed the issue of whether the recoveries ordered against the sureties were justified in a series of writ petitions. The court noted that the petitions raised common questions of law and fact and decided to dispose of them through a common order. The petitions involved a third party and sureties challenging the recoveries ordered against them by the respondents. The key question was whether the recoveries were justified or not.

The court observed that notices and sale proclamations were made concerning the property of the sureties for years in which they did not stand as sureties. The petitioners argued that all sureties given should be considered against the assessment of tax for a year as estimated by the dealer, as per Section 12 of the Andhra Pradesh General Sales Tax Act, 1957. The court referred to Section 12(7) of the Act, which allows the authority to impose conditions for the issue of a certificate of registration, including requiring security from the dealer. Rule 28(8) further empowers the registering authority to demand security not exceeding the estimated tax payable for a year for proper realization of taxes.

Moreover, the court highlighted the significance of form D, which includes the estimated total turnover for the year in which the application is submitted. The court interpreted that a surety given by a person on behalf of an assessee remains in force against the tax payable for a year as estimated by the assessee. This interpretation was supported by a previous judgment of the court in a similar matter.

In conclusion, the High Court, following the precedent set in a previous judgment, allowed the writ petitions and quashed the impugned orders for recoveries against the sureties. The court did not award any costs in this matter.