2017 (6) TMI 1246 - HC - VAT and Sales Tax

Verdict passed by the learned Single Judge - crux of the grievance is that the challenge raised by the petitioner against Ext.P2 series notices issued by the authorities in respect of the different months of 2016 has not been properly appreciated with reference to actual facts and figures - Held that - The explanation sought to be offered from the part of the petitioner was not all palatable in view of the specific provision for compounding. By virtue of the option exercised by the petitioner and the sanction given accordingly, it was obligatory for the assessee to have satisfied the tax in terms of the compounding provision. It was accordingly, that interference was declined and the writ petition was dismissed. The petitioner has satisfied a portion of the outstanding liability. There are no tenable ground to intercept the verdict passed by the learned Single Judge declining interference on merits. Appeal disposed off.

Summary

Issues:
Challenge to Ext.P2 series notices regarding compounded tax under VAT Act for non-working quarry and crusher unit. Interpretation of compounding provision. Permissibility of satisfying tax liability in instalments.

Analysis:
The judgment concerns the challenge raised against Ext.P2 series notices issued to the petitioner regarding compounded tax under the VAT Act for the non-working quarry and crusher unit. The petitioner contended that due to the stop memo issued by the Mining & Geology Department, there was no production, and therefore, no exigency to tax. The petitioner also sought permission to satisfy the liability by way of reasonable instalments due to the huge liability. The learned Single Judge held that the petitioner's explanation was not acceptable considering the specific provision for compounding. The Judge declined interference and dismissed the writ petition but allowed the petitioner to clear the arrears in six instalments with a default clause.

Upon review, the High Court found no grounds to interfere with the Single Judge's decision on the merits. However, in light of submissions that the petitioner was prepared to start satisfying the liability from a specific date, the Court modified the installment schedule. The first remittance was rescheduled to be due on 1-7-2017, followed by subsequent installments on or before the first day of succeeding months. Recovery proceedings were to be kept in abeyance, with the provision for the revenue to take further steps in case of default in any installment. The appeals were disposed of accordingly, maintaining the decision on the challenge to the notices while adjusting the installment payment schedule as per the petitioner's readiness to commence payments from a specified date.