2001 (4) TMI 900 - HC - VAT and Sales Tax

Court upholds tax notice validity, dismisses petition, justifies coercive steps during pendency

Tata Cellular Ltd. Versus Commercial Tax Officer, Nampally, Hyderabad and others

Tata Cellular Ltd. Versus Commercial Tax Officer, Nampally, Hyderabad and others - [2006] 146 STC 485 (AP) Issues Involved:1. Legality of the notice issued under Section 17 of the Andhra Pradesh General Sales Tax Act, 1957.2. Requirement of forwarding a copy of the garnishee notice to the dealer.3. Coercive steps taken by the first respondent during the pendency of the revision petitions.4. Allegations of arbitrariness and illegality in the coercive measures adopted by the first respondent.Detailed Analysis:1. Legality of the Notice Issued Under Section 17 of the Act:The petitioner, a public limited company and registered dealer under the Andhra Pradesh General Sales Tax Act, 1957, sought a writ of mandamus declaring the notice issued by the first respondent to HDFC Bank under Section 17 of the Act as illegal and void. The petitioner contended that the notice was issued without following the proper procedure, specifically the requirement to send a copy of the notice to the dealer before or simultaneously with the issuance to the garnishee.2. Requirement of Forwarding a Copy of the Garnishee Notice to the Dealer:The court examined Section 17 of the Act, which mandates that a copy of the garnishee notice must be forwarded to the dealer at his last known address. The petitioner argued that the notice should be sent in advance or at least simultaneously with the issuance to the garnishee, citing the Punjab and Haryana High Court's decision in Atma Tube Products Ltd. v. Union of India. However, the court found that while forwarding a copy of the notice to the dealer is mandatory, the Act does not specify the exact timing for doing so. The objective is to inform the dealer about the recovery to prevent third-party interests and avoid embarrassment. The court concluded that sending the notice to the dealer a day after issuing it to the garnishee did not invalidate the notice, as no prejudice was shown to have been caused to the petitioner.3. Coercive Steps Taken by the First Respondent During the Pendency of the Revision Petitions:The petitioner argued that coercive steps should not have been taken while the revision petitions were pending before the Joint and Additional Commissioner (CT) (Legal). The court referred to the division bench judgment in Anab-E-Shahi Wines and Distilleries Private Limited v. Appellate Deputy Commissioner, which held that coercive steps are improper while a stay application is pending. However, the court distinguished this case, noting that the stay applications had already been rejected by the appellate authority, and therefore, the first respondent was justified in taking steps to recover the tax.4. Allegations of Arbitrariness and Illegality in the Coercive Measures:The petitioner claimed that the first respondent's actions were arbitrary and illegal. The court found no merit in this contention, stating that once the stay applications were rejected, there was no legal impediment to the first respondent taking steps under Section 17 of the Act to recover the tax. The court emphasized that it was the duty of the first respondent to recover the tax to serve public interest, and the actions taken were within the legal framework provided by the Act.Conclusion:The court dismissed the writ petition, finding no merit in the petitioner's claims. It held that the notice issued under Section 17 was valid, the timing of forwarding the notice to the dealer did not cause any prejudice, and the coercive steps taken by the first respondent were justified and within legal bounds. The court also directed the Joint and Additional Commissioner (CT) (Legal) to expedite the disposal of the pending revision (stay) petitions.