2019 (8) TMI 867 - HC - VAT and Sales Tax

Court halts cinema closure over tax arrears, requires bank guarantee within a week.

The court held in favor of the writ petitioner regarding entertainment tax arrears and closure of the cinema theatre, keeping the impugned communication ... Recovery of arrears of Entertainment tax - attachment of property - mortgage of the immovable property after conditional release by the Court - HELD THAT:- In the light of the fact that writ petitioner has shown her bona fides not only by offering to furnish bank guarantee and keep the same alive as per directions of this Court, but has also deposited the entire bank guarantee sum in bank account of her son from which bank guarantee is to be issued - Writ petitioner shall furnish a bank guarantee for the entire sum of ₹ 7,11,000/- through the bank account of writ petitioner's son viz., R.Swethaprakash, with SB Account No.2836201000178, Canara Bank Krishnagiri Branch, in which according to the writ petitioner ₹ 7,00,000/- has already been deposited on 01.08.2019 for this purpose - petition disposed off. Issues:1. Entertainment tax arrears and closure of cinema theatre.2. Request for modification of the interim order due to medical ailments and financial difficulties.Issue 1: Entertainment tax arrears and closure of cinema theatreThe writ petitioner, represented by Mr. R. Neelakandan, contested the demand for entertainment tax, stating that there were no arrears as the cinema theatre had been closed since 2000. The petitioner claimed to have not received any prior notice regarding the alleged tax dues. The central argument was articulated in the affidavit, denying any outstanding entertainment tax for the mentioned periods. The Additional Government Pleader and Government Advocate sought time to verify the claims. In light of the petitioner's assertions and the potential auction of the property, the court decided to keep the impugned communication on hold until further proceedings, emphasizing the importance of avoiding irreversible actions. The matter was adjourned for the next listing.Issue 2: Request for modification of the interim order due to medical ailments and financial difficultiesSubsequently, a new application, WMP No.23273 of 2019, was filed by the petitioner seeking modification of the earlier order due to severe medical conditions, including renal malfunction. The petitioner's family intended to mortgage the property to fund medical treatment, but the interim order prevented such actions. The petitioner proposed to furnish a bank guarantee through their son's account to cover the alleged demand mentioned in the impugned order. The court acknowledged the petitioner's medical urgency and financial constraints, noting the difficulty in locating old assessment files. Considering the petitioner's genuine intentions and the deposited bank guarantee sum, the court ordered the following:a) The petitioner to furnish a bank guarantee for the full amount within one week.b) The bank guarantee to be in favor of the third respondent and in the required form.c) Upon furnishing the bank guarantee, the impugned order would be set aside automatically.d) The third respondent to serve assessment orders on the petitioner within a fortnight post bank guarantee submission.e) If assessment orders cannot be located, proceedings to be completed within 12 weeks after receipt of the court's order.The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed.This detailed analysis of the judgment highlights the key issues, arguments presented, court's considerations, and the final orders issued by the court, ensuring a comprehensive understanding of the legal proceedings.