2015 (4) TMI 126 - HC - VAT and Sales Tax

Stay application - Recovery of tax dues - Issuance of garnishee order - order issued by the Deputy Commissioner of Commercial Taxes - Held that - Since there is an effective statutory remedy available to the petitioner, we do not propose to go into the merits of the contentions raised by the petitioner in the writ petitions. Mr. Sumit Kumar, Senior Manager (Finance), BHEL, Bokaro Thermal Power Station is present in the Court and the learned Senior counsel on instruction submitted that the petitioner has sufficient funds with the DVC and the statement is recorded. Having regard to the submissions of the petitioner that the petitioner's source of finance is only DVC and consequent to the garnishee order issued to the DVC, the petitioner - which is a public sector undertaking is not in a position to make day to day payment of salary, statutory liability and other legal obligations and keeping in view the interest of the petitioner - a public sector undertaking and also the employees, we are inclined to grant interim stay of the garnishee order on conditions stated hereunder. - interim Stay granted subject to conditions.

Issues Involved:
1. Validity of the garnishee orders issued by the Deputy Commissioner of Commercial Taxes.
2. Pendency and disposal of revision petitions filed by the petitioner.
3. Coercive recovery measures affecting the petitioner's financial operations.
4. Interim relief and statutory remedies available to the petitioner.

Issue-wise Detailed Analysis:

1. Validity of the Garnishee Orders:
The petitioner challenged the garnishee orders issued by the Deputy Commissioner of Commercial Taxes under Section 46 of the Jharkhand Value Added Tax Act, 2005. These orders directed the Chief Engineer, Bokaro Thermal Power Station, to pay significant sums of money for various financial years (2008-09, 2009-10, 2011-12) on account of tax dues, penalties, or interest payable. The petitioner argued that these garnishee orders were unjustified, especially since revision petitions and stay petitions were pending.

2. Pendency and Disposal of Revision Petitions:
The petitioner had filed revision petitions against reassessment and assessment orders for the financial years 2008-09, 2009-10, and 2011-12. The petitioner contended that the garnishee orders were issued despite the pendency of these revision petitions. The respondents, however, claimed that the revision petitions for the years 2008-09 and 2009-10 had already been disposed of, and only the revision petition for 2011-12 was pending.

3. Coercive Recovery Measures:
The petitioner highlighted the adverse impact of the garnishee orders on its financial operations, including the inability to make day-to-day payments of salaries, statutory liabilities, and other legal obligations. The petitioner argued that the garnishee orders issued to Damodar Valley Corporation (DVC) and the State Bank of India resulted in the coercive recovery of substantial amounts, which affected its financial stability.

4. Interim Relief and Statutory Remedies:
The court considered the petitioner's plea for interim relief, given the financial constraints caused by the garnishee orders. The court acknowledged the petitioner's argument that the garnishee orders hindered its ability to fulfill financial obligations and noted the importance of maintaining the petitioner's operational stability. Consequently, the court granted an interim stay on the garnishee orders for four months, subject to certain conditions.

Judgment and Directions:
The court disposed of the writ petitions with the following directions:
1. The petitioner was directed to pay Rs. 1,50,00,000/- in two installments: Rs. 75,00,000/- by 31.03.2014 and Rs. 75,00,000/- by 30.04.2014. This payment was to be made without prejudice to the contentions of both parties.
2. Damodar Valley Corporation was instructed to release the specified installments from the amounts payable to the petitioner and transfer them to the Deputy Commissioner of Commercial Taxes.
3. The petitioner was directed to actively pursue the pending revision petition without seeking adjournments and to cooperate in the revision proceedings.
4. The Commissioner of Commercial Taxes was instructed to consider and dispose of the pending revision petition within three months, after providing sufficient hearing opportunities.
5. For the disposed revision petitions related to the financial years 2008-09 and 2009-10, the petitioner was advised to seek statutory remedies within four weeks by filing necessary applications before the competent authority.

The court's judgment aimed to balance the petitioner's financial stability with the need to address the tax demands, ensuring that the petitioner's operations were not unduly disrupted while the legal processes were ongoing.

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