Writ interference refused at show cause stage in luxury tax recovery matter; taxpayers left to reply before assessment

Writ interference was declined against tax recovery communications issued at the show cause stage under the Gujarat Tax on Luxuries (Hotels and Lodging Houses) Act, 1977. The Court noted that the impugned demand was still preliminary and that the petitioners could raise their objections before the Collector. It directed the Collector to consider any reply and proceed in accordance with law, including completing assessment if required. The petitioners were therefore left to pursue their defence in the statutory process, and the Court did not intervene at this stage.

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Issues: Whether the Court should interfere with the impugned communications and show cause notice issued in respect of recovery of tax under the Gujarat Tax on Luxuries (Hotels and Lodging Houses) Act, 1977.

Analysis: The communications challenged by the petitioners were only at the stage of a show cause notice and a demand related to alleged unpaid taxes. The petitioners relied on the statutory scheme under section 5 for filing returns and section 6 for acceptance of returns or assessment before further demand could be raised. At this preliminary stage, the Court found no reason to exercise writ interference and instead left it open to the petitioners to submit a reply before the Collector, who was directed to proceed in accordance with law after considering the reply and, if necessary, complete assessment as per law.

Conclusion: The Court declined to interfere with the impugned communications at the show cause stage and left the petitioners to pursue the matter before the Collector.

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