Court invalidates tax on inter-state stock transfers, orders refund with interest

The High Court allowed the petitioner's writ petition, quashing the original order and demand notice regarding the imposition of tax on stock transfers in inter-state trade. The court declared the original order as invalid and permitted the Assessing Officer to issue a fresh assessment order. Additionally, the court ordered the refund of the deposited amount with interest to the petitioner, as requested by their counsel, emphasizing that any future demands must comply with the law. The petition was disposed of accordingly.

---

---

Issues:
Challenge to imposition of tax on stock transfers in inter-state trade; Withdrawal of assessment order and demand notice; Refund of deposited amount with interest.

Analysis:
The petitioner filed a writ petition seeking to quash an order and demand notice issued by the Assistant Excise and Taxation Commissioner, contending that the imposition of tax on stock transfers in inter-state trade was beyond the State Legislature's jurisdiction and violated relevant provisions of the Central Sales Tax Act, 1956. The State counsel, on behalf of the ETO, Moga, agreed to withdraw the assessment order and requested the opportunity to pass a fresh assessment order after providing the petitioner with a hearing. Consequently, the High Court declared the original order and demand notice as non est, allowing the Assessing Officer to issue a fresh assessment order and demand notice in compliance with the law.

Following a previous court order, the petitioner had deposited 25% of the demanded amount in a fixed deposit of a nationalized bank. The petitioner's counsel requested the return of this amount along with the accrued interest, a request that was unopposed by the State counsel. The court directed the Registrar (Judicial) to refund the deposited amount with interest to the petitioner promptly. It was emphasized that any future demand raised by the State should be handled in accordance with the law. Subsequently, the petition was disposed of by the High Court.

---