Installment relief for auction purchasers seeking sales tax registration certificate, with cancellation and recovery on default

Auction purchasers seeking a registration certificate under sales tax law were treated as having inherited the outstanding liability under the relevant sales tax and State Finance Corporation provisions, even though the original default lay with the former owner. Because their business was being impeded without registration, and they undertook to clear the arrears by instalments, the HC granted permission to pay the demand in monthly instalments and directed issue of the registration certificate. The relief was conditional: if any instalment was missed, the certificate could be cancelled and the balance recovered, while current tax liability remained unaffected.

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Issues: Whether the petitioners, who were auction purchasers, could be granted time by instalments to clear the arrears of sales tax demand and obtain the registration certificate under the sales tax law, and what consequences would follow on default.

Analysis: The petitioners were not the primary defaulters, the original liability having rested on the erstwhile owner, but the Court noticed that the liability had passed to them under the relevant sales tax and State Finance Corporation provisions. Since their business was being hampered for want of a registration certificate, and they undertook to clear the entire demand by instalments, the Court accepted the undertaking and granted relief on terms. The order also preserved the right to cancel the registration certificate and recover the balance if any instalment was missed, while leaving current tax liability unaffected.

Conclusion: The petitioners were granted permission to pay the arrears by monthly instalments, and the respondent was directed to issue the registration certificate, subject to cancellation and recovery in the event of default.

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