2019 (8) TMI 862 - HC - VAT and Sales Tax

Recovery of alleged arrears of Entertainment Tax - Attachment and auction of property - HELD THAT - There is no tax arrears, that they have paid the entire entertainment tax and that writ petitioner has not received any notice or communication prior to the impugned communication dated 08.07.2019, the impugned communication shall be kept in abeyance till the next listing as encumbrance regarding auction of immovable property of writ petitioner can cause an irreversible situation - Likewise, writ petitioner or any one claiming under writ petitioner shall not deal with the immovable property that is subject matter of impugned communication till the next listing in any manner. List this matter on 13.08.2019.

Summary

Issues:
Entertainment tax arrears for a cinema theatre, lack of notice or communication prior to the impugned communication dated 08.07.2019.

Analysis:
The High Court of Madras addressed a writ petition concerning entertainment tax liabilities related to a cinema theatre. The writ petitioner contended that there were no entertainment tax arrears, emphasizing that the theatre had been closed since 2000 and had not received any prior communication regarding the alleged tax dues. The petitioner's case was centered on the absence of demands for entertainment tax, especially for the period between 2002-03 to 2004-05. The affidavit filed in support of the petition explicitly denied any arrears of entertainment tax for the mentioned periods. The petitioner's argument highlighted the crucial point that no communication or notice was received before the impugned communication dated 08.07.2019.

The court noted the submissions of the learned Additional Government Pleader and Government Advocate, who accepted notice on behalf of the respondents and requested time to obtain instructions. Considering the petitioner's assertion that there were no tax arrears, the court decided to keep the impugned communication in abeyance until the next listing. This decision aimed to prevent any irreversible consequences, particularly regarding the auction of the petitioner's immovable property. The court further directed that neither the petitioner nor any party claiming under the petitioner should deal with the subject property until the next listing. The matter was scheduled for further proceedings on 13.08.2019.

In conclusion, the judgment by the Madras High Court highlighted the importance of addressing entertainment tax liabilities for a cinema theatre while emphasizing the necessity of proper notice and communication in such matters. The court's decision to temporarily suspend the impugned communication aimed to safeguard the petitioner's interests and prevent any hasty actions that could lead to irreversible consequences. The case underscored the significance of procedural fairness and the need for clear communication in tax-related disputes to ensure a just and equitable resolution.