2007 (4) TMI 660 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to a show-cause notice issued by the respondent regarding sales tax dues.
2. Interpretation of a scheme framed by the Board for Industrial and Financial Reconstruction (BIFR) for revival.
3. Applicability of penalty and interest under the scheme.
4. Pending application under the Samadhan Scheme.
5. Disposition of the writ petition.

Analysis:

The petitioner, a steel casting foundry company, filed a writ petition challenging a show-cause notice issued by the respondent regarding sales tax dues. The petitioner argued that the BIFR's revival scheme covered waiver of penal charges and interest outstanding under the Commercial Taxes Department, which includes the amount demanded by the respondent. The petitioner contended that until the company revives its original position, the amount cannot be recovered without a specific positive order from the BIFR. Additionally, the petitioner claimed to have paid the entire sales tax amount and covered the penal interest under the scheme. The petitioner also mentioned a pending application under the Samadhan Scheme. The court noted that the scheme covers penalty and interest payable on belated tax payments by the petitioner, while the tax itself is collected from parties and remitted to the government. The court found no need to adjudicate on the show-cause notice, allowing the petitioner to file objections regarding subsequent developments, including the inclusion of penalty and interest in the scheme, tax payments, pending Samadhan Scheme application, and favorable orders obtained. The court disposed of the writ petition, granting two weeks for the petitioner to file objections and directing the respondent to proceed in accordance with the law. No costs were awarded in this matter.