2009 (11) TMI 894 - HC - VAT and Sales Tax

Summary

Issues involved:
The issues involved in the judgment are the validity of a notice issued under Section 29 of the A.P.VAT Act, 2005 for remittance of tax dues, pending appeal before the 3rd respondent, and the quashing of a garnishee notice.

Validity of Notice under Section 29 of the A.P.VAT Act, 2005:
The petitioner, a Public Joint Stock Company from Russia engaged in construction of Oil and Gas Pipelines, was directed by the 1st respondent to remit tax dues amounting to Rs. 3,29,53,535/- for the years 2006-07 and 2007-08. The petitioner, a registered dealer under the 2005 Act, had its assessment audited by the 2nd respondent, who determined a tax liability of Rs. 2,65,31,061/- for 2007-08. Despite filing an appeal and stay petition before the 3rd respondent, a garnishee notice was issued by the 1st respondent under Section 29 of the 2005 Act. The petitioner argued that issuing the garnishee notice while the appeal was pending would be inequitable. The High Court, after hearing both parties, quashed the garnishee notice but allowed the 1st respondent to initiate appropriate processes based on the 3rd respondent's decision on the stay application.

Conclusion:
In conclusion, the High Court quashed the garnishee notice issued by the 1st respondent under Section 29 of the A.P.VAT Act, 2005, dated 09-10-2009, considering the pending appeal and stay petition before the 3rd respondent. The 1st respondent was granted the liberty to take necessary actions for recovery based on the outcome of the 3rd respondent's decision on the petitioner's appeal. The writ petition was disposed of at the admission stage with no order as to costs.