J.K. Tyre and Industries Ltd. vs State

Essentially the subject matter of these petitions is the reopening of assessments by the respondents in relation to the partial exemption availed by the petitioner under the notification dated 06.05.1986 issued by the State Government u/s 85 of the Central Sales Tax Act, 1956 (''the Act of 1956''). The allegation against the petitioner has essentially been of having misused the exemption granted and, despite having collected the tax from the customers, having not deposited the same with the State.

The stand of the petitioner, put in a nutshell, is that it had legally and justifiably obtained the benefit of remission under the notification dated 06.05.1986. It has also been submitted that the method as provided under the notification itself led to the position of the petitioner being able to calculate the exact amount of tax payable to the State at the end of the assessment year and not before.

As at present stage, we do not propose to elaborate further on the issues involved in the matter. Suffice it to notice that by way of writ petition filed in the year 2006 (CWP No. 3620/2006), the petitioner questioned the notices for re-assessment for the periods, 2002-03 and 2003-04. This Court admitted the writ petition taking note of the submissions made on behalf of the petitioner and further proceedings under the impugned notices were ordered to remain stayed. The said stay order came to be confirmed on 08.05.2007 with liberty to the respondents to apply for vacating after filing reply. An application seeking modification was also disposed of on 06.02.2013 with the directions that the said petition as also the other petition (CWP No. 4055/2010) be posted for final hearing.

The position regarding CWP No. 4055/2010 is that this petition came to be filed by the present petitioner on the same subject but in relation to the notices issued by the respondents for the assessment years 2004-05 to 2006-07. In the said petition, notices were ordered to be issued on 03.05.2010. It appears that while the said petition remained pending with no interim order, re-assessment order came to be made on 22.03.2013. The petitioner prayed for amendment of the petition taking challenge to the said reassessment order dated 22.03.2013. The prayer for amendment was, after contest, allowed by a coordinate Bench on 14.05.2013 to avoid multiplicity of litigation. Thereafter, on 21.05.2013, the matter was ordered to be posted for final disposal on 29.05.2013. On 29.05.2013, the Court observed that the matter could not be taken up for final hearing for paucity of time and posted it beyond summer vacations on 02.07.2013. The said two matters had thereafter, been listed several times but got adjourned.

In the meanwhile, the respondents have proceeded to pass yet another order on 21.03.2014 in relation to the assessment year 2007-08 relating to the same subject matter. After passing of the order against the petitioner, the authority concerned also issued a notice for demand of payment on the same date, i.e., on 21.03.2014 calling upon the petitioner to make payment within 30 days and else, for taking up the proceedings for recovery of the amount recoverable as arrears of land revenue and to all modes of recovery provided under the Act as also for prosecution.

The petitioner has challenged this order dated 21.03.2014 in CWP No. 3340/2014. In this petition, on 07.05.2014, copies were directed to be supplied to the learned counsel for the respondents.

Today, upon taking up of the matter in CWP No. 3340/2014 and the counsel for the petitioner seeking interim protection with the submissions that there had been undertaking/understanding in the other matter not to adopt coercive recovery proceedings, the learned AAG submitted that even if on the earlier occasion, i.e., on 29.05.2013, if any understanding was stated on behalf of the respondents, there are no instructions to that effect at the present. The learned AAG has thereafter proceeded to read out the substantial part of the impugned order dated 21.03.2014 to make the submissions that the order has been passed in a justified manner and there is no prima facie case in favour of the petitioner. It has also been pointed out that the pendency of the other litigation in this Court has been duly taken note of as also the fact that no specific order has been passed by the Court in CWP No. 4055/2010; and that the authority has yet made the order subject to the orders to be passed by this Court.

Having taken note of the facts and circumstances in their totality, the position obtaining is to the effect that as regards the assessment years 2002-03 and 2003-04, on the same subject matter of reopening of assessment and recalling the remission granted, the proceedings do remain stayed pursuant to interim order passed in CWP No. 3620/2006. Then, for the years 2004-05 to 2006-07, though the assessment orders have been made but they are subject to challenge in CWP No. 4055/2010. It is not in dispute that until this date, the respondents have not adopted coercive recovery proceedings against the petitioner in relation to the assessment orders which are subject matter of CWP No. 4055/2010. In the present matter too, 30 days period for the notice for payment of demand dated 31.03.2014 has gone by and specific coercive proceedings are yet to be adopted by the respondents.

In view of the issues involved, it is considered appropriate that the later petition, i.e., CWP No. 3340/2014 be also formally admitted and posted for final hearing at orders stage. Ordered accordingly. The respondents being represented, notices need not be issued.

Having regard to the fact that these are impending summer vacations beyond this week and until 29.06.2014 and the overall facts and circumstances as noticed hereinabove, so far the aspects relating to interim relief/arrangement are concerned, it is considered appropriate and hence ordered that from today and until next date in these matters, In case the respondents intend to take up coercive recovery proceedings against the petitioner in relation to the demand arising out of the orders which are subject to challenge in CWP No. 4055/2010 as also in CWP No. 3340/2014, they shall serve a clear 7 days notice on the petitioner. Upon service of any such notice, it shall be permissible for the petitioner to take recourse to the appropriate remedies in accordance with law including making of a request for taking up of these matters for consideration during summer vacations.

Subject to the above, these matters may be posted for final hearing on 30.06.2014