Interim protection in tax reassessment challenge granted against coercive recovery subject to part-deposit and filing defects ignored.

Reassessment proceedings under the Bihar Finance Act were challenged on the ground that the notice was not issued in the statutory Form XIV under the Bihar Sales Tax Rules and that coercive recovery was imminent. The High Court granted interim protection against coercive action pending the State's counter affidavit, subject to deposit of 20% of the tax demand. It also ignored the filing defect and disposed of the interlocutory application for exemption from filing a certified copy of the appellate order.

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Issues: (i) Whether the petitioner made out a case for interim protection against coercive recovery action pending filing of counter affidavit; (ii) Whether the interlocutory application for ignoring the defect and exemption from filing certified copy of the appellate order deserved to be disposed of.

Analysis: The writ petition challenged reassessment proceedings initiated under section 17(2) read with section 19(1) of the Bihar Finance Act, 1981, with the petitioner contending that the notice dated 12.01.2009 was not in the statutory Form XIV prescribed under Rule 20 of the Bihar Sales Tax Rules, 1983 and that coercive steps were apprehended in view of the demand notice. The Court granted the State time to file counter affidavit and, in the meantime, considered it appropriate to protect the petitioner from coercive action on a condition of deposit of part of the tax demand. The defect in filing was also ignored and the interlocutory application was disposed of.

Conclusion: Interim protection against coercive steps was granted subject to deposit of 20% of the tax demand, and the interlocutory applications were disposed of.

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