Advance tax recovery and garnishee notice under sales tax law: dishonoured cheques did not bar recovery, but valid third-party objection defeated notice.

Advance tax shown in monthly statements under section 12B(1) of the Karnataka Sales Tax Act was treated as an amount due for recovery under section 13 when the statements were accepted as neither incorrect nor incomplete; dishonoured cheques did not by themselves require a provisional assessment under section 12B(2), so recovery could proceed without it. A notice under section 14 could not, however, be enforced against a third party who validly objected under section 14(5) that no amount was due or held for the dealer on the relevant date, because that statutory objection barred compulsion to pay the assessing authority.

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Issues: (i) Whether advance tax payable along with monthly statements under section 12B(1) of the Karnataka Sales Tax Act, 1957 could be recovered without first making a provisional assessment under section 12B(2) when the accompanying cheques were dishonoured; (ii) Whether notice issued under section 14 of the Karnataka Sales Tax Act, 1957 could be enforced against the third party when the third party objected that no amount was due or held on behalf of the dealer on the date of notice.

Issue (i): Whether advance tax payable along with monthly statements under section 12B(1) of the Karnataka Sales Tax Act, 1957 could be recovered without first making a provisional assessment under section 12B(2) when the accompanying cheques were dishonoured.

Analysis: The monthly statements filed by the dealer were accepted as neither incorrect nor incomplete. Section 12B(1) expressly deems the amount payable on the basis of such statements to be an amount due under the Act for the purposes of section 13. The proviso for provisional assessment under section 12B(2) applies only where no statement is filed or where the statement appears to be incorrect or incomplete. Dishonour of the cheques did not by itself convert the statements into incorrect or incomplete statements. The amount covered by the dishonoured cheques therefore remained recoverable as an amount due, and recovery could proceed under section 13(3) and section 14.

Conclusion: The absence of a provisional assessment order did not bar recovery, and the objection on this ground failed.

Issue (ii): Whether notice issued under section 14 of the Karnataka Sales Tax Act, 1957 could be enforced against the third party when the third party objected that no amount was due or held on behalf of the dealer on the date of notice.

Analysis: Section 14(5) provides that if the person served with notice objects that the sum demanded is not due by him to the dealer, or that he does not hold any money for or on account of the dealer, nothing in that section requires him to pay the amount to the assessing authority. The third party had categorically stated that no amount was due on the relevant dates. In view of that objection, the statutory bar under section 14(5) operated, making it unnecessary to examine further whether amounts were likely to become due under the business arrangement.

Conclusion: The notice could not be enforced against the objecting third party under section 14.

Final Conclusion: The challenge failed on the main question of recoverability, but the garnishee notice itself could not be pressed against the third party after a valid statutory objection.

Ratio Decidendi: Amounts payable as advance tax under section 12B(1), once filed in monthly statements and not shown to be incorrect or incomplete, are deemed to be amounts due and recoverable under section 13 even without a provisional assessment, but a garnishee notice under section 14 cannot compel payment where the noticee successfully objects under section 14(5) that no money is due or held for the dealer.

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