Court dismisses petition challenging tax notice under AP Sales Tax Act due to evasion, contemptuous behavior.

The Court dismissed the petition challenging a statutory notice under section 17 of the Andhra Pradesh General Sales Tax Act, 1957, due to the company's history of evading tax payments and abusing legal processes. Despite directions to pay current dues and opportunities for installment payments, the company displayed contemptuous behavior and failed to comply. The Court refused relief through writ jurisdiction, emphasizing that it is not meant to reward evasion of tax payments. Costs were imposed on the company for misleading the Court and the Government Pleader, and leave to appeal to the Supreme Court was denied. The writ petition was ultimately dismissed.

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Issues:
Challenge to statutory notice under section 17 of the Andhra Pradesh General Sales Tax Act, 1957 based on inability to pay the demanded amount.

Analysis:
The petitioner-company, a registered dealer under the A.P. General Sales Tax Act, was required to submit monthly returns along with full tax payment by the 25th of the succeeding month to the assessing authority. Failure to comply attracted penalties under the Act. The company had a history of defaulting in tax payments and resorting to various means to avoid payment, reflecting a pattern of evasion and abuse of legal processes.

The Court initially considered allowing the company to pay the tax amount in instalments but found the company's conduct lacking in grace and cooperation, resulting in further delays and loss of interest to the respondents. Despite directions to pay current dues, the company failed to comply and even applied for instalments without informing the Court, displaying contemptuous behavior. The Court concluded that the company was taking advantage of legal processes to delay tax payments for its benefit, to the detriment of public revenue.

The respondents detailed the company's conduct, including non-payment of electricity dues, obtaining injunctions to avoid disconnection, dishonoring cheques, and failing to adhere to payment schedules. The company, despite thriving in the cement industry, developed a habit of evading, avoiding, and litigating tax payments, leading to substantial arrears.

The Court rejected the company's reliance on the Sick Industrial Companies Act, noting that the company was not closed, sick, or undergoing revival, but actively operating and prospering in a lucrative industry. Considering the company's conduct and circumstances, the Court refused to grant any relief through writ jurisdiction, emphasizing that Article 226 of the Constitution is not meant to reward evasion of tax payments. The petition was dismissed, and interim orders were vacated.

Due to the company's conduct misleading the Court and the Government Pleader, costs of Rs. 5,000 were imposed on the company. The Court denied leave to appeal to the Supreme Court, citing the absence of substantial questions of law requiring consideration. The writ petition was ultimately dismissed.

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