2009 (2) TMI 767 - HC - VAT and Sales Tax

Payment and recovery of tax - Held that - If the subject-matter of demand is already in issue in a different writ petition, in respect of that amount an independent writ petition does not lie. It is for the petitioner to seek appropriate orders in the very writ petition and not to question the recovery in an independent writ petition. That apart, in the notice under section 13(3)(b), while can be characterised as an innocuous notice or as an unnecessary notice, what is indicated therein is that if the assessee fails to remit the amount as has been assessed within a period of seven days from the date of receipt of the notice, action under section 13(3)(b) of the Act will be resorted to. This writ petition is, therefore, totally unnecessary and without any justifiable cause of action. In any view of the matter, the writ petition deserves to be dismissed. It is open to the petitioner to pursue his remedies in the writ petition which is already filed.

Summary

Issues:
Assessment of tax liability for the periods 2002-03, 2003-04, and 2004-05 under the Karnataka Sales Tax Act, 1957; Challenge to the show-cause notice under section 13(3)(b) of the Act for recovery of tax arrears.

Analysis:
The judgment pertains to a writ petition filed by an assessee challenging the tax liability assessment and the show-cause notice issued by the Commercial Tax Department of the Government of Karnataka for the recovery of tax arrears. The tax liabilities for the periods 2002-03, 2003-04, and 2004-05, along with penalties, were detailed in the petition. The recovery was sought under section 13(3)(b) of the Karnataka Sales Tax Act, 1957.

The petitioner argued that the tax amount under the notice was already subject to a pending assessment order challenge in a separate writ petition. The petitioner contended that the recovery proceedings were premature and should be quashed. On the other hand, the Government Pleader representing the respondent argued that challenging recovery proceedings through a separate writ petition was not permissible when the assessment order was already under dispute elsewhere.

The judgment highlighted that the notice under section 13(3)(b) was merely an informative step and did not determine the petitioner's rights conclusively. It emphasized that the proper course for the petitioner was to address the issue within the existing writ petition challenging the assessment order rather than filing a separate petition solely on recovery grounds.

The court explained the provisions of section 13(3)(b) regarding the recovery of tax arrears and clarified that the notice issued by the Deputy Commissioner of Commercial Taxes was not a conclusive action but a precursor to potential recovery proceedings before a magistrate. The judgment underscored that the notice itself did not achieve the objective of recovery and that the proper procedure involved filing an application before the magistrate for recovery.

Ultimately, the court deemed the writ petition as unnecessary and lacking a justifiable cause of action. It concluded that the petitioner should pursue remedies within the existing writ petition challenging the assessment order rather than seeking relief solely on the recovery notice grounds. Consequently, the writ petition challenging the show-cause notice under section 13(3)(b) was dismissed.