2015 (12) TMI 849 - HC - VAT and Sales Tax

Levy of entry tax under the provisions of U.P. Tax on Entry of Goods Into Local Areas Act, 2007 - Attachment of bank account - Held that - we dispose of the writ petition directing the Deputy Commissioner Assessment to decide the petitioner s representation within four weeks from the date of presentation of a certified copy of the order and provide the calculation on the basis of which the figure towards interest has been indicated in the impugned notice dated 4th July, 2015. This calculation will be made after giving an opportunity of hearing to the petitioner. - Till the disposal of the petitioner s application, no attachment of the petitioner s bank account or recovery, as per the impugned notice dated 4th July, 2015, will take place. - Stay granted.

Summary

Issues:
Challenge to levy of entry tax under U.P. Tax on Entry of Goods Into Local Areas Act, 2007.

Analysis:
The petitioners challenged the levy of entry tax under the U.P. Tax on Entry of Goods Into Local Areas Act, 2007. The Division Bench of the High Court had upheld the vires of the Act in a previous judgment. The petitioners filed a special leave petition in the Supreme Court against this judgment. The Supreme Court passed an interim order staying the operation of the High Court's judgment, subject to certain conditions. The conditions included depositing 50% of the accrued tax liability/arrears under the Act and furnishing a bank guarantee for the remaining amount. The petitioners were also directed to pay the tax at the prevailing rate for the future period. The petitioners claimed to have complied with the interim order by depositing 50% of the disputed amount and providing a bank guarantee for the remaining 50%.

The Deputy Commissioner (Commercial Tax Division) issued a notice directing the petitioners to further deposit a specific amount towards interest. The petitioners filed a writ petition challenging this notice, arguing that they were unaware of how the interest amount was calculated. They had requested details of the interest computation from the Deputy Commissioner, but the matter was pending since a specific date. Meanwhile, the respondent was seeking recovery by attaching the petitioners' bank account, prompting the need for the writ petition.

After hearing the arguments, the Court disposed of the writ petition by directing the Deputy Commissioner Assessment to decide the petitioner's representation within four weeks. The Deputy Commissioner was instructed to provide the calculation basis for the interest amount mentioned in the impugned notice. The calculation was to be made after giving the petitioner an opportunity to be heard. The Court ordered that no attachment of the petitioner's bank account or recovery, as per the notice, should occur until the petitioner's application was disposed of.

In conclusion, the writ petition challenging the notice for further deposit towards interest was disposed of by the Court, with directions for the Deputy Commissioner to address the petitioner's representation and provide a detailed calculation of the interest amount before taking any recovery actions.