2009 (11) TMI 844 - HC - VAT and Sales Tax

Court Upholds Recovery Steps for Non-Compliance with Settlement Orders

KM. Moosa Versus Inspecting Assistant Commissioner, Muvattupuzha and another

The court upheld recovery steps against the petitioner for failing to comply with settlement orders under the Kerala General Sales Tax Act. Despite the ... Recovery steps challenged - petitioner seeking directions for permitting remittance of amounts under the amnesty settlements, in installments - timelimit within which the remittances need be made Held that:- Having failed in remitting the initial amount of 25 per cent or the subsequent monthly instalments, the request of the petitioner for remitting payment of the settled amount could not be accepted, at this belated stage. It is evident that inspite of receipt of the order in December 2008, the petitioner had raised objection against the wording in those orders, only by filing this writ petition during October, 2009. A further contention raised by the petitioner that no specific order was issued by the authority concerned cancelling the benefit of the settlement issued under exhibits P5 and P5(a) need to be rejected as it is evident that the petitioner had never acted upon in accordance with the settlement and the settlement so permitted has never come into effect. Therefore the recovery steps now initiated cannot be assailed on the ground that no specific order cancelling the settlement is issued. W.P. dismissed. Issues:Assessment challenge under KGST Act, settlement of arrears under section 23B, failure to make payments as per settlement orders, challenge against recovery steps, cancellation of settlement orders.Assessment Challenge under KGST Act:The petitioner challenged assessments for 1998-99 and 1999-2000 under the Kerala General Sales Tax Act. The appeal against the assessment was dismissed, and subsequently, the petitioner applied for settlement of arrears under section 23B due to amendments in the Act. Orders were passed settling the outstanding arrears for both years at reduced amounts, instructing immediate payment.Failure to Make Payments as per Settlement Orders:The petitioner contended that the settlement orders did not specify the timeline for payments or provide for installment facilities as required under section 23B(4). Despite the petitioner's attempts to highlight the procedural requirements to the second respondent, no corrective action was taken on the orders.Challenge Against Recovery Steps:Recovery steps were initiated against the petitioner for failing to make payments as per the settlement orders. The petitioner expressed readiness to remit the amounts covered by the settlement orders and challenged the recovery steps, seeking permission to make payments in installments.Cancellation of Settlement Orders:The petitioner argued that no specific order cancelling the settlement under exhibits P5 and P5(a) was issued. However, the court found that the petitioner had not complied with the settlement terms, rendering the settlement ineffective. Therefore, the recovery steps initiated were deemed valid even without a formal cancellation order.The court observed that the petitioner failed to make the required payments within the specified timelines as per section 23B(4). Despite being aware of the procedural obligations, the petitioner did not act promptly, leading to the initiation of recovery steps. The court emphasized that the petitioner's delay in challenging the wording of the settlement orders and failure to comply with payment terms undermined the validity of the challenge against recovery steps. As the settlement was not acted upon by the petitioner, the recovery steps were upheld without the need for a specific cancellation order. Consequently, the writ petition was dismissed for lacking merit.