TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the petitioner could resist demand notices for sales tax collected during the tax-holiday period despite holding an eligibility certificate; (ii) Whether the notices granting only three days for payment were sustainable.
Issue (i): Whether the petitioner could resist demand notices for sales tax collected during the tax-holiday period despite holding an eligibility certificate.
Analysis: The eligibility certificate itself was subject to the condition that any sales tax collected had to be remitted to the Government. The Court also relied on the principle that a small-scale industry enjoying a tax holiday cannot collect sales tax, since the benefit granted was total exemption and not deferred payment.
Conclusion: The petitioner was liable to pay the collected sales tax, and the demand notices were valid on this ground.
Issue (ii): Whether the notices granting only three days for payment were sustainable.
Analysis: The period granted for compliance was held to be unreasonable.
Conclusion: The notices were bad to the extent that they allowed only three days for payment, and four weeks' time was directed instead.
Final Conclusion: The writ petition failed on the main challenge to the demand, but the payment period in the notices was modified as unreasonable.
Ratio Decidendi: A unit granted a tax holiday cannot retain sales tax actually collected when the eligibility certificate makes remittance of collected tax obligatory, though an unreasonably short period for compliance may be corrected.
TaxTMI 
