2009 (4) TMI 864 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of demand notice for payment of sales tax arrears.
2. Crediting of amount paid by petitioner against outstanding tax dues.
3. Allegations of duplicate payment and demand for higher amount.
4. Justification of interest amount demanded under section 13(2) of the Act.
5. Petitioner's awareness of previous demands and contention of illegality in current notice.
6. Bona fide nature of writ petition and justification for seeking a declaration.

Analysis:
1. The writ petition challenges a demand notice for payment of sales tax arrears under the Karnataka Sales Tax Act, 1957. The petitioner argues that the notice overlooks the payment of Rs. 64,27,821 made towards the arrears, seeking to quash the demand notice at annexure E through a writ of certiorari.

2. The petitioner asserts that the amount of Rs. 64,27,821, though remitted through a demand draft, has not been credited by the Department. However, the Government Pleader contends that the current demand is for interest under section 13(2) of the Act, distinct from the arrears paid by the petitioner, supported by a communication detailing the interest payable up to March 31, 2007.

3. The Government Pleader clarifies that the demand for Rs. 80,49,741 is not new but was previously communicated in April 2007, with subsequent recovery notices issued due to non-payment of the interest amount. The petitioner's claim of duplicate payment or non-credit of the amount paid is refuted, emphasizing the distinct nature of the current demand.

4. The interest amount calculated for the years 1996-97 to 2000-01 aligns with the sum demanded in annexure E, reinforcing the legality and justification of the interest component under section 13(2) of the Act.

5. Despite the petitioner's awareness of previous demands and the nature of the current demand, the petition challenges the higher amount without crediting the earlier payment, alleging illegality and surprise at the notice issued in November 2008.

6. The court finds the petitioner's contentions lacking merit and potentially suppressing the truth, deeming the writ petition as not a bona fide exercise of seeking relief. Consequently, the petition is dismissed, and costs of Rs. 50,000 are awarded to the Revenue, with the option for the respondent to claim the amount through a registry application.