2017 (10) TMI 545 - HC - VAT and Sales Tax

Validity of notice of attachment/garnishee order - tax arrear - case of petitioner is that on account of severe financial crunch and since the policy of the Government with regard to liquor trade is in a nebulous state the petitioner is unable to raise finances from the open market and therefore pleads that the petitioner may be granted sufficient time to pay arrears with interest in equated monthly instalments - Held that - this Court is inclined to grant some indulgence to the petitioner considering the fact that the petitioner is undergoing severe financial crisis - petition allowed.

Summary

Issues:
1. Notice of attachment/garnishee order passed by the third respondent for VAT arrears.
2. Petitioner's financial constraints and request for payment in equated monthly instalments.
3. Revenue's interest in clearing tax arrears.
4. Granting indulgence to the petitioner due to financial crisis.

Analysis:
1. The petitioner challenged a notice of attachment/garnishee order for VAT arrears. The petitioner had previously filed a similar petition for relief, which was disposed of by allowing payment in instalments. The petitioner sought clarification on the order, which was granted, allowing payment in instalments. The petitioner complied with the directions, clearing the arrears with interest.

2. The petitioner, facing financial difficulties due to a vague government policy on liquor trade, requested more time to pay the arrears in equated monthly instalments. The Additional Government Pleader argued that the petitioner must clear the arrears promptly to protect the Revenue's interests.

3. After hearing both sides and reviewing the previous order, the Court acknowledged the petitioner's financial crisis and granted indulgence. The Court directed the petitioner to pay the entire arrears with interest in five equal monthly instalments. Failure to comply would automatically revive the attachment order.

4. In a related matter, the Court found no error in the order but noted the petitioner's claim of operational defects. As the case was listed for mention, no further order was deemed necessary. The judgment aimed to balance the petitioner's financial challenges with the Revenue's interests, providing a structured payment plan while ensuring compliance with tax obligations.