Law: Sales Tax Act, 1990

Section: 48

Law: Sales Tax Rules, 2006

Section: 71

Sales Tax Act (VII of 1990)----S.48 --Sales Tax Rules, 2006, R.71--Sales tax, recovery of--Tax recovered from bank accounts of tax payer before expiry of the 30 days period mentioned in R.71 of the Sales Tax Rules, 2006--Legality-- Admittedly, the period of 30-days was not allowed to lapse or expire before initiation of the recovery process and the modalities mentioned in R.71 of the Sales Tax Rules, 2006 (‘the Rules’) were also not followed as required under the law inasmuch as the of the Appellate Tribunal Inland Revenue was handed on 28-09-2021 and recovery was effected on the same day, which action on part of the revenue authorities (respondents) clearly violated R.71 of the Rules-- Impugned action of effecting recovery from the bank accounts of the taxpayer (petitioner) without complying with R.71 was declared to be without lawful authority and accordingly set-aside--Constitutional petition was allowed with the direction that the amount unlawfully recovered from the bank accounts of the taxpayer shall be refunded/reimbursed to it within 30-days. JUDGMENT: AAMER FAROOQ, JUSTICE:---.--- The petitioner was selected for audit under section 72-B of the Sales Tax Act, 1990 (‘the Act’) for the Tax Year July 2013 to June 2014. It approached this Court by way of Writ Petition No 570/2016, which was disposed of on 18.05.2018. Respondent No 3 issued a show-cause notice to the petitioner on 23.10.2018, alleging discrepancies pursuant to the audit report; the referred notice was duly responded, however, the same culminated in Order-in-Original on 29-12.2018. Appeal was preferred by the Commissioner (Appeals) against the said Order-in-Original, which was decided vide order dated 12.02.2019, whereby partially the same was accepted but the issue pertaining the inadmissibility of tax was decided against the petitioner. Both the parties challenged the order-in-appeal before the Appellate Tribunal Inland Revenue, which was decided on 28.09.2021 and on the same date recovery was effected, against the petitioner in the sum of Rs.976,462,191/- under section 48 of the Act read with Rule 71 of the Sales Tax Rules, 2006 (‘the Rules’). The said recovery was effected from the Bank…

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