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Issues: (i) Whether subsidy payable to industrial units through the nodal disbursing agency could be brought within the ambit of recovery under Section 44 of the Assam Value Added Tax Act, 2003; (ii) Whether the communication directing withholding of subsidy disbursement without prior clearance from the tax authority was without jurisdiction; (iii) Whether the impugned communication could be sustained despite the absence of reconciliation of the petitioners' tax payments with the amounts shown as due.
Issue (i): Whether subsidy payable to industrial units through the nodal disbursing agency could be brought within the ambit of recovery under Section 44 of the Assam Value Added Tax Act, 2003.
Analysis: Section 44 provides a special mode of recovery with a non-obstante clause and permits recovery from any person from whom money is due or may become due to the dealer, as well as from any person holding money on account of such dealer. The subsidy, once approved by the competent committees and finally sanctioned for release, became an amount due to the industrial unit. Since the relevant industrial policy also contemplated adjustment of outstanding government dues before release, the subsidy amount could fall within the recovery mechanism under Section 44.
Conclusion: The subsidy payable through the nodal agency could be subjected to recovery of admitted government dues under Section 44.
Issue (ii): Whether the communication directing withholding of subsidy disbursement without prior clearance from the tax authority was without jurisdiction.
Analysis: The communication was issued only to require the nodal agency not to disburse subsidy without prior clearance or concurrence where tax dues were outstanding. In view of the statutory recovery power and the policy stipulation requiring clearance of outstanding dues before disbursement, the request could not be treated as ultra vires or lacking authority merely because it operated at the stage of proposed subsidy release.
Conclusion: The communication was not without jurisdiction in principle.
Issue (iii): Whether the impugned communication could be sustained despite the absence of reconciliation of the petitioners' tax payments with the amounts shown as due.
Analysis: The petitioners asserted that the figures of default shown in the communication were inaccurate because prior tax payments had not been reconciled. That assertion was not disputed by affidavit from the tax authorities. The Court therefore held that recovery could proceed only for the actual dues, after notice to each petitioner and determination of the correct liability.
Conclusion: The figures in the impugned communication were set aside for the petitioners, and fresh determination of actual dues was directed.
Final Conclusion: The recovery power of the tax authorities was upheld, but the impugned demand communication was quashed as to the petitioners and the authorities were directed to issue notice, reconcile payments, determine the correct dues, and then proceed in accordance with law.
Ratio Decidendi: A subsidy amount that has become due and is pending release through the nodal disbursing agency can be treated as money due for the purpose of statutory recovery, but recovery must be confined to the correctly determined actual tax dues after reconciliation and notice.
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