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of <h1>Dismissal of Writ Petition to Restrain Tax Penalty & Bank Guarantee Encashment</h1> <h3>Saroop Tanneries Ltd. Versus State of Haryana and Others</h3> The Court dismissed the writ petition filed under Article 226 to restrain penalty recovery and bank guarantee encashment under the Punjab General Sales ... - Issues:Petition under Article 226 to restrain encashment of bank guarantee and penalty recovery under Punjab General Sales Tax Act, 1948. Challenging recovery of penalty without proper notice and opportunity to appeal. Previous dismissal of a similar writ petition by the same petitioner.Analysis:The petitioner, a company engaged in the manufacture and sale of goods, purchased raw hides for production. The goods were detained by authorities, claiming tax liability under the Punjab General Sales Tax Act, 1948. The petitioner contended that no tax was due under this Act as sales tax was payable under the Central Sales Tax Act, and the goods were dispatched from Uttar Pradesh. Despite the petitioner's arguments, a penalty of Rs. 2,55,000 was imposed, and the goods were released upon furnishing a bank guarantee of the same amount.The petitioner alleged that they held an Exemption Certificate allowing tax-free purchases, and no demand notice was served before the bank guarantee was encashed. The petitioner challenged the recovery method, citing lack of opportunity to appeal against the penalty and absence of proper notice. The Court noted the availability of an appeal process under the Act against the penalty imposition and recovery. As such, filing a writ petition under Article 226 was deemed premature due to the existence of an alternative remedy.Furthermore, the Court highlighted a prior writ petition by the same petitioner concerning a similar issue, which was dismissed for being premature. The previous petition was not disclosed in the current filing, leading to criticism from the Court for failing to mention the earlier legal action. Consequently, the Court dismissed the present writ petition, citing the previous dismissal and the petitioner's failure to disclose the prior legal proceedings.In conclusion, the Court dismissed the current writ petition, emphasizing the importance of disclosing previous legal actions on the same matter and reiterating the availability of alternative remedies under the Act for challenging penalties and recovery processes.
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