Law: Sales Tax Act, 1990

Section: 36,48

(a) Sales Tax Act (VII of 1990)----Ss. 36 & 48---Issuance of-show-cause notice---Requirement of---Scope--¬Provision of S.48, Sales Tax Act, 1990, is penal in nature and the same cannot be enforced without a show-cause notice served on the party concerned---When S.48 is read in conjunction with S.36 of Sales Tax Act, 1990, it clearly lays down that serving of a show-cause notice is mandatory. (b) Sales Tax Act (VII of 1990)----Ss. 36 &. 48---Adjusting of duty drawback amount in a claim for arrears of sales tax, without issuance of show-cause notice---Contention by Authorities was that letter containing audit observation constituted show-cause notice--¬Validity---No indication was found in that letter to the effect that the Authorities had given any intimation to the plaintiff of their intention to adjust the amounts due against any other payment that might be due to them by any other Government body---Where the law had provided for a show¬ cause notice to be issued, it was necessary that such show-cause notice should clearly indicate that it happened to be a show-cause notice, so that the person to whom it was issued was aware that if he did not appear to show ¬cause, adverse action might be taken against such person---No such intimation could be gleaned from the letter containing audit observation, consequently such letter did not constitute a show-cause notice under the provisions of Sales Tax Rules, 1992, or Sales Tax Act, 1990, in circumstances. (c) Sales Tax Act (VII of 1990)----S. 36---Exercising lien on amount held by Collector of Sales Tax--¬Jurisdiction---Collector of Sales Tax was fully entitled to exercise lien on the amounts held by him on account of refund of claim of a person---Such exercise of lien could not be regarded as violation of S.36 of Sales Tax Act, 1990, or the principle of natural justice. JUDGMENT Brief facts of the case are that the plaintiff is registered as a manufacturer-cum-exporter under Sales Tax Registration No.12-00-6200-159-55 with the defendant No.3 since September, 1996. The Plaintiffs contend that for the purposes of encouraging exports, the Defendant No. l has enacted that the rate of sales tax will be zero…

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