1998 (12) TMI 594 - HC - VAT and Sales Tax

Court upholds penalty for failure to pay Central tax on inter-State sales

Akash Coke Industries Pvt. Limited Versus State of Bihar and Others

The court upheld the validity of the penalty notice and proceedings, ruling in favor of the State's imposition of penalty on the petitioner for failure to ... - Issues:1. Challenge to notice for penalty under the Bihar Finance Act and Central Sales Tax Act.2. Imposition of penalty on the petitioner.3. Jurisdiction of the court in challenging penalty order.4. Applicability of Central tax on inter-State sale of goods.5. Validity of the impugned notice and penalty proceedings.6. Effect of stay order on penalty imposition.7. Grounds for challenging penalty order.Analysis:1. The petitioner challenged a notice dated July 20, 1989, calling for penalty under the Bihar Finance Act and Central Sales Tax Act. The petitioner contended that the notice was illegal as Central tax is not required if State tax on the same goods has been paid. The State disputed this claim.2. The petitioner was penalized on August 2, 1989, for not paying the admitted tax under the State Act. The petitioner argued that the penalty order was not challenged in the writ petition, but the court held that the penalty was justified as the tax was not paid within the specified time.3. The court addressed the jurisdictional issue raised by the petitioner regarding challenging the penalty order. The court clarified that the penalty notice was valid as the petitioner did not pay the Central tax as required by law.4. The court discussed the applicability of Central tax on inter-State sales, emphasizing that every dealer must pay Central tax on such sales, even if State tax has been paid previously. The petitioner's failure to pay the Central tax justified the penalty proceedings.5. The court upheld the validity of the impugned notice and penalty proceedings, rejecting the petitioner's arguments against them. The court emphasized the necessity of paying Central tax on inter-State sales.6. The court considered the effect of the stay order on the penalty imposition, concluding that the penalty was imposed before the stay order was communicated to the relevant authority.7. The petitioner's grounds for challenging the penalty order were addressed, with the court rejecting the arguments based on violation of the stay order and the tax payment on coal versus coke sales in inter-State trade.8. The writ petition was ultimately dismissed by the court, with no costs imposed, and both judges agreed on the decision to dismiss the petition.