2013 (5) TMI 773 - HC - VAT and Sales Tax

Surety bond furnished to claim exemption from payment of tax under rule 28A of the Haryana General Sales Tax Rules, 1975 - Held that - Recovery proceedings against the surety can be initiated only in respect of surety bonds for the relevant period. - Following decision of Om Parkash Aggarwal and Another Versus State of Haryana and Others 2013 (3) TMI 584 - PUNJAB AND HARYANA HIGH COURT - Decided in favour of assesse.

Summary

Issues: Recovery proceedings against the petitioner as a surety based on a surety bond dated April 3, 1993.

In the judgment delivered by HEMANT GUPTA J., the court addressed the challenge in the writ petition concerning recovery proceedings against the petitioner as a surety based on a surety bond dated April 3, 1993. The petitioner's grievance was related to M/s. Hilton Rubbers Limited seeking exemption from tax under the Haryana General Sales Tax Act, 1973, and the petitioner submitting a surety bond for the assessment year 1993-94. The petitioner argued that recovery proceedings could only be initiated for the period covered by the surety bond and not for subsequent periods requiring separate surety bonds. The court referred to a previous order in "Om Parkash Aggarwal v. State of Haryana [2013] 62 VST 470 (P&H)" where it was held that recovery proceedings against the surety should be limited to the relevant period covered by the surety bonds. The respondents did not contest the petitioner's factual assertions, leading the court to allow the writ petition based on the precedent set in the mentioned case.

This judgment highlights the importance of ensuring that recovery proceedings against a surety are in accordance with the terms of the surety bond provided. It establishes the principle that recovery actions should be limited to the specific period covered by the surety bond and cannot extend to subsequent periods requiring separate bonds. The reliance on a previous judgment reinforces the consistency and precedent set by the court in similar cases, providing a clear guideline for such matters in the future. The court's decision to allow the writ petition based on established legal principles underscores the significance of adherence to contractual obligations and legal requirements in matters involving surety bonds and recovery proceedings.