2007 (3) TMI 696 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in the judgment are coercive recovery of sales tax and penalty by the assessing authority before statutory remedies are exhausted, imposition of penalty by the assessing officer, remand of the matter to the assessing officer by the Appellate Assistant Commissioner, coercive steps taken by the assessing authority against the petitioner, declaration of the petitioner-company as a sick company, and the timeline for filing appeals before the appellate authorities.

Coercive Recovery of Sales Tax and Penalty:
The petitioner sought a writ of mandamus to prevent the assessing authority from taking coercive steps for demanding and collecting arrears of sales tax and penalty for the assessment years 1996-97, 1997-98, and 1998-99 until statutory remedies are exhausted under the Central Sales Tax Act, 1956 and Tamil Nadu General Sales Tax Act, 1959.

Imposition of Penalty and Remand:
The assessing officer had completed the assessment for the mentioned years and imposed penalty due to the claim made by the reduced rate of tax and exemption under certain forms. The petitioner filed appeals before the Appellate Assistant Commissioner who remanded the matter to the assessing officer after setting aside the penalty imposed.

Coercive Steps by Assessing Authority:
While the appeals were pending, the assessing authority took coercive steps by pressurizing the petitioner's bankers to pay the amount due, despite the appeals being heard and reserved for orders. The petitioner argued that such actions were not legally acceptable, especially when the appeals were pending.

Declaration of Sick Company and Additional Developments:
The petitioner-company was declared as a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985. During the argument, it was highlighted that the penalty imposed by the assessing officer had been set aside by the Appellate Assistant Commissioner, and certain matters were remitted back for assessment orders. The petitioner contended that they had the right to file appeals before the second appellate authority within the prescribed time limit.

Judgment and Order:
The court directed the assessing authority not to take coercive steps against the petitioner for demanding and collecting arrears of sales tax and penalty until the appeal time expires. The petitioner was also given the option to move the appellate authority for interim orders. The writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed.