2014 (5) TMI 1156 - HC - Indian Laws

Demanding residue of the unpaid taxes from the petitioners under the Gujarat Tax on Luxuries (Hotels and Lodging Houses) Act 1977 - Held that - Since the communication issued by the Collector is only in the form of a show cause notice we are not inclined to interfere at this stage leaving it open for the petitioners to approach the Collector. If no reply is filed so far it would be open for the petitioners to do so latest by 20.5.2014. Collector shall proceed in accordance with law after considering the reply if any so filed. If no assessment is made on the returns filed by the petitioners the same may also be done in accordance with law.

Summary

Issues: Challenge to communication demanding unpaid taxes under the Gujarat Tax on Luxuries Act, 1977; rejection of refund request for past taxes; validity of show cause notice issued by the Collector.

Analysis:
1. Challenge to Communication Demanding Unpaid Taxes: The petitioners challenged communications from the Mamlatdar and the Collector demanding unpaid taxes under the Gujarat Tax on Luxuries Act, 1977. The Collector's communication, issued as a show cause notice, sought to withdraw the permission granted for paying consolidated tax and recover the tax with penalties. The petitioners contended that for the latter period, they had filed returns under section 5 of the Act, and as per section 6, the Collector must either accept the return or make an assessment before raising further tax demands.

2. Rejection of Refund Request for Past Taxes: The issue of refund for past taxes had been previously considered in Special Civil Application No.16719 of 2013, where the petitioners' request was rejected due to late approach and voluntary tax payment following return filings. The court disposed of the petitioners' request for a refund on these grounds.

3. Validity of Show Cause Notice: The High Court, in the current petition, declined to interfere at that stage since the communication by the Collector was in the form of a show cause notice. The court left it open for the petitioners to approach the Collector and file a reply by a specified date. The Collector was directed to proceed in accordance with the law after considering any reply filed by the petitioners. If no assessment had been made on the returns filed by the petitioners, the court instructed that the assessment should be done in accordance with the law.

In conclusion, the High Court disposed of the petition at that stage, permitting direct service and allowing the petitioners to address the issues raised by the authorities through the appropriate legal channels.