2017 (12) TMI 1539 - HC - VAT and Sales Tax

Non-payment of tax - petitioner s case is that it is never their intention not to pay the tax but due to unexpected contingency and stringent financial crisis they were unable to pay the tax - Held that - there is no provision under the Puducherry Value Added Tax Act to permit the dealer to remit tax in installments. If that be so the Court would not be justified in granting such indulgence. However this will not preclude the second respondent from considering the bona fidies of the dealer/petitioner and make necessary accommodation. This is with a view to ensure that the tax is collected from the defaulting dealer at the earliest - petition disposed off.

Summary

Issues:
Challenge to demand notice for Value Added Tax (VAT) | Request for installment payment of arrears | Consideration of petitioner's bonafides | Direction for payment and unlocking online facility for Form-C Declaration

Analysis:
The petitioner challenged a demand notice for VAT amounting to ?1,17,97,795 for September and October 2017 due to financial crisis. The petitioner expressed willingness to pay but sought installment payment, which was not provided for under the Puducherry Value Added Tax Act. The court acknowledged the payment of ?1,00,04,645 towards arrears and directed the petitioner to pay ?35 lakh for the mentioned months. The second respondent was asked to consider unlocking the online facility for Form-C Declaration upon payment. The petitioner was required to provide an undertaking on how they plan to clear the remaining balance, with a clear directive that this arrangement only applied to the specified arrears and not for future months.

The court noted the absence of provisions for installment payments under the VAT Act but emphasized the importance of tax collection from defaulting dealers promptly. While denying the request for installment payment, the court allowed the second respondent to assess the bonafides of the petitioner and make suitable arrangements. The judgment aimed to balance the petitioner's financial constraints with the need for timely tax payments, ensuring that the arrears were settled partially with a plan for full payment and a directive for future compliance. The decision provided a pragmatic solution by acknowledging the petitioner's efforts to clear arrears while upholding the legal framework's requirements for tax payment.