Law: Sales Tax Act, 1990

Section: 21,2(46),3,6,23,26,33,34

Law: Special Procedure for Ginning Industries Rules, 1996

Section: 5(5),6(5)

Sales Tax Act (VII of 1990)---Ss. 21, 2(46), 3, 6, 23, 26, 33 & 34---Special Procedure for Ginning Industry Rules, 1996, Rr. 5(5) & 6(5)---De-registration, blacklisting and suspension of registration---Recovery of sales tax along with additional tax on the ground that registered person had supplied bales of cotton lint to different defaulting units---Registered person contended that supply of cotton lint was made in the years 2002/2003 whereas said units were blacklisted in 2004 and principal amount of tax on supplies had already been paid by the buyers---First Appellate Authority found that ginners were required not to deliver the cotton lint to blacklisted spinners unless they had paid the sales tax outstanding against them; however, directed to exclude the amount of principal tax and additional tax, if any, already paid by the spinners or registered person from the adjudged and recoverable amounts of tax along with additional tax and penalty---Registered person further contended that mere inclusion of a unit in a list of suspicious units or declaring as a suspected unit would not render same fake unless it was declared as a blacklisted unit after due process of law that order passed by the Collector directing ginners not to deliver or supply ginned goods to defaulter spinning units; that ginner was liable only if supply was made after the date of receipt of such order of Collector; that if a ginning unit after receipt of such order made delivery or supply of ginned cotton to such spinning units or exporters without prior payment of the amount of sales tax, such ginner shall be liable to pay sales tax, additional tax, and penalty that department had not supplied such order to the registered person and the registered person was not aware of blacklisting at the time of making supplies; that service must be made through personal service and registered person was not personally served and their service through substituted means was defective---Validity---Registered person was charged without adherence to the procedure laid down by law and First Appellate Authority had confirmed the action of Adjudication Officer without appreciating the facts of the case…

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