Law: Sales Tax Act, 1990

Section: 48,2(2A),45B&21

Sales Tax Act (VII of 1990)---Ss. 48, 2(2A), 45-B & 21---Recovery of arrears of tax---Notice for recovery of due amount---Notice for recovery of arrears---Registered person was forced to deposit the tax to de-block its National Tax Number---Appeal of the taxpayer was accepted by the First Appellate Authority and allowed refund of the said amount---Revenue contended that notice was issued under S.48 of the Sales Tax Act, 1990 for payment of due amount recoverable against fake and flying invoices; that appeal under S.45-B(1) of the Sales Tax Act, 1990 could not be filed. against the order passed under S,48 of the Sales Tax Act, 1990; that First Appellate Authority was not justified to give order for issuance of refund without considering the facts that input tax claimed/adjusted on the invoices issued by the blocked/black-listed suppliers; that goods on which input tax was unlawfully adjusted were imported for use in manufacturing whereas the same were sold in the market; and that no input adjustment was admissible---Registered person contended that business were closed due to blocking and they had no option except to pay the demanded amount under protest; that they were asked to deposit the amount without issuing of show-cause notice and without adjudication as per procedure prescribed under the law; and that notice under S.48 of the Sales Tax Act, 1990 could only be issued for recovery of arrears of tax---Validity---Notice under S.48 of the Sales Tax Act, 1990 was issued without application of mind and without following the requirements of law---If the taxpayer unlawfully adjusted the input tax, they should have been issued show-cause notice for violating the provision of law and the same should have been adjudicated upon---Notice under S.48 of the Sales Tax Act, 1990 was issued for the recovery of arrears as defined under S.2(2A) of the Sales Tax Act, 1990 whereas the amount under reference did not fall within the category of arrears---Department did not bother to investigate whether the suppliers had paid the sales tax on the invoices issued to the taxpayer---No exercise was undertaken to verify the same---Suppliers declared black-listed subsequently…

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