2008 (5) TMI 618 - HC - VAT and Sales Tax

Whether a person other than one who is registered under the Tripura Sales Tax Act 1976 shall obtain permit as prescribed in form XVIII in terms of the provision of rule 46 read with rule 47 of the Tripura Sales Tax Rules 1976 in order to enable such a person bring into the State of Tripura goods which are taxable under the Act? Held that - What cannot be ignored is that though in para 6 of the writ petition it had been clearly pointed out by the writ petitioner that she was not liable to obtain any permit in form No. XVIII the respondents have in their affidavit-in-opposition seriously disputed such contention of the petitioner and asserted that obtaining of a permit in terms of the provisions of the Rules is a condition precedent for bringing taxable goods into the State of Tripura. Thus the justification offered by the respondents for insisting obtaining of the permit leaves this court with no option but to hold that the respondents have harassed the petitioner by illegally forcing her to make payment of the said sum of Rs. 17, 761 and in such circumstances the respondents are liable to pay the interest for withholding the said amount. Therefore it is hereby directed that the respondents shall pay the said sum of Rs. 17, 761 within one month from today with interest at six per cent per annum from October 8 1998 until realisation of the said amount. This apart in face of the peculiar facts and circumstances of the present case the respondents shall also be held liable to pay a sum of Rs. 500 as minimum possible cost of the legal proceeding.

Summary

Issues:
Whether a person, not registered under the Tripura Sales Tax Act, 1976, needs a permit to bring taxable goods into the State of Tripura as per rules 46 and 47 of the Tripura Sales Tax Rules, 1976.

Analysis:
The petitioner purchased a new car from a dealer in Calcutta and faced issues at a check-post in Tripura for not having a permit as required by the Sales Tax Rules. The petitioner sought a refund of the sales tax paid and compensation for the vehicle's illegal detention. The respondents argued that a permit is mandatory for bringing taxable goods into Tripura, citing discrepancies in the petitioner's application for the permit.

The court examined rules 45, 46, and 47, which mandate a permit for registered dealers to transport taxable goods. It analyzed form XVIII, which outlines the requirements for obtaining a permit. The court concluded that a non-registered person is not obligated to apply for or obtain a permit in form XVIII. The respondents' insistence on the permit was deemed legally flawed, and the sales tax payment forced upon the petitioner was declared illegal.

Despite the petitioner's assertion of not needing a permit, the respondents maintained that it was a prerequisite. The court held the respondents accountable for unlawfully pressuring the petitioner to pay sales tax and ordered the refund of the amount with interest. Additionally, the respondents were directed to pay a legal proceeding cost of Rs. 500, considering the circumstances of the case.

In conclusion, the court ruled in favor of the petitioner, declaring the sales tax payment illegal and ordering the refund with interest. The respondents were directed to pay the specified amount within a month, along with additional costs for the legal proceedings. The writ petition was disposed of with costs imposed on the respondents.