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2010 (6) TMI 734 - HC - VAT and Sales Tax
Issues:
Quashing of recovery proceedings under Punjab General Sales Tax Act, 1948 based on the ground of laches and jurisdictional aspects. Analysis: The petitioner, engaged in the construction of motor vehicles, supplied vehicles to Delhi Transport Corporation in the assessment year 2001-02. Subsequently, a raid on the petitioner's business premises led to a best judgment assessment, followed by a demand for tax and an order of reassessment dated October 31, 2006. The petitioner challenged the recovery proceedings initiated against them, arguing that the assessment was without jurisdiction, lacked the necessary conditions for reassessment, and violated principles of natural justice. The court found that the petition was liable to be dismissed due to laches, as no explanation was provided for the delay of over three years in filing the petition after the cause of action arose. The petitioner had not taken any steps earlier to challenge the order of assessment dated October 31, 2006. The court emphasized the importance of invoking jurisdiction under Article 226 of the Constitution at the earliest reasonable opportunity, citing precedents such as Tilokchand Motichand v. H. B. Munishi and Eastern Coalfields Limited v. Dugal Kumar. The petitioner's reliance on judgments like Provincial Government of Madras v. J. S. Basappa, Raza Textiles Ltd. v. Income-tax Officer, Rampur, and Public Prosecutor (A. P.) v. Mukha Singh Chanda was deemed distinguishable by the court. While acknowledging that orders without jurisdiction can be challenged through a writ petition, the court emphasized that such remedies must be sought promptly. The court highlighted that the principle of laches could bar interference with a petition, even if the order was without jurisdiction. Ultimately, the court dismissed the petition, finding no grounds for interference. Before concluding, the court directed the registry to send a copy of the order to the Chief Secretary, Punjab, to investigate the reasons for the significant delay in initiating recovery proceedings and to take appropriate action against those responsible, emphasizing the importance of avoiding such delays in the recovery of public funds.
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