2005 (7) TMI 638 - HC - VAT and Sales Tax

Summary

Issues:
Petitioner seeking a writ to prevent enforcement of recovery proceedings under demand notices for tax liabilities, application for instalment facility pending before the State Government, challenge to the constitutional validity of tax provision, discretion in exercising authority, legality of application under rule 20A, claim for mandamus, precedent of previous court order, applicability of Supreme Court decision on hardship.

Analysis:
The petitioner, a registered dealer under the Karnataka Sales Tax Act, sought a writ to restrain the Deputy Commissioner of Commercial Taxes from enforcing recovery proceedings for tax liabilities totaling Rs. 16,25,885 and Rs. 12,76,111 for different assessment years. The petitioner also requested a writ to direct the State of Karnataka to dispose of an application for instalment facility. The petitioner challenged the constitutional validity of the tax provision under section 5C of the Act, arguing that the matter was pending before a Division Bench. The petitioner claimed considerable hardship if forced to pay the tax liability, especially as no taxes were collected from customers. A previous court order provided temporary relief in a similar situation.

The court noted that the application for instalment payments was a concession, not a right, and mandamus did not apply to matters of concession. The court emphasized that the mere filing of an appeal does not stay recovery proceedings, especially in cases of concession. The court rejected the petitioner's contention that the tax liability was unjust, stating that the application was for payment of tax, not disputing liability. The court clarified that the previous court order did not set a legal precedent and was specific to the circumstances of that case.

Regarding the Supreme Court decision on hardship in tax compliance, the court distinguished the situation, stating that the petitioner sought a concessional facility, not compliance with a tax payment condition. The court concluded that the petitioner's case did not justify issuing a writ of mandamus and rejected the writ petition, finding no grounds for entertaining it. The court emphasized that concession is not a right and that the Supreme Court decision cited was not applicable to the current case's facts and circumstances.