2010 (7) TMI 895 - HC - VAT and Sales Tax

Summary

Issues: Challenge to notices under section 45 of the Karnataka Value Added Tax Act, 2003; Interpretation of sections 39(1)(b) and 62(2)(a) of the VAT Act; Petitioner's request to de-freeze accounts for depositing amount with appellate authority; Requirement of depositing 50% of demanded amount for stay of reassessment order; Direction to appellate authority for timely disposal of stay application.

The judgment addresses the challenge raised by the petitioner against the notices issued under section 45 of the Karnataka Value Added Tax Act, 2003. The petitioner contests the hurried initiation of recovery proceedings by the respondent before the expiry of the appeal filing period. The petitioner's counsel argues that the respondent should wait for the appeal period to lapse before taking action. On the other hand, the Government Pleader asserts that under section 39(1)(b) of the VAT Act, the assessee must pay the demanded amount within ten days of reassessment, without waiting for the appeal period. The petitioner seeks a harmonious interpretation of sections 39(1)(b) and 62(2)(a) of the VAT Act, emphasizing that all provisions should be considered together.

The court declines to entertain the challenge to the notices under section 45, stating that they are consequential to the reassessment order, and the petitioner can appeal the reassessment order under section 62 of the VAT Act. The petitioner requests the de-freezing of accounts with HDFC Bank and Army Welfare Housing Organisation to deposit the amount with the appellate authority. The Government Pleader informs the court that HDFC Bank has already remitted a portion of the demanded sum to the respondent, while the total liability under the reassessment order is around Rs. 81,00,000. To seek a stay of the reassessment order, the petitioner must pay 50% of the demanded amount as per section 62(4)(c) of the VAT Act.

The court directs the appellate authority to promptly decide on the petitioner's stay application in the anticipated appeal if the remaining Rs. 25,91,000 is deposited by the petitioner or received from the third parties. The Government Pleader assures that the authority will consider the amount already received and require only the balance for the stay application to be processed. If the petitioner fails to file the appeal or deposit the required amount, the respondent is permitted to recover the demanded sum in accordance with the law. The petitions are disposed of with no costs imposed.