D. Pitchaiah Vs. Assistant Commercial Tax Officer, Rajahmundry and ors. - Court Judgment

Excerpt:

sales tax - notice - notice issued by assessing authority to third party restraining them from making payment to petitioner challenged - assessing authority had no jurisdiction to call upon third party to withhold payment to petitioner - impugned notice liable to be quashed - assessing authority not precluded from making provisional assessment or final assessment and take appropriate proceedings for recovery of tax. - order1. the relief prayed for in this writ petition with regard to the constitutional invalidity of clauses 2(iii)(a) and 2(viii) of act 18 of 1985 is concluded by the decision of this court in w.p. no. 841 of 1985 and batch, dated 3rd november, 1986 (padmaja commercial corporation v. commercial tax officer [1987] 66 stc 26) wherein it is held that the proceedings for levy of sales tax on works contract is valid. 2. the learned counsel for the petitioner however contends that the assessing authority issued a notice to the third party restraining them from paying the amount of rs. 8 lakhs to the petitioner. it is not in dispute that either the provisional assessment or the assessment is not made as yet. before making any provisional assessment, the respondent has no jurisdiction to call upon the third party to withhold the payment to the petitioner. in so far as the issuance of notice or a direction for withholding the payment is concerned, it is quashed. the assessing authority is not precluded from making provisional assessment or final assessment and take appropriate proceedings for recovery of the tax. the writ petition is partly allowed. no costs. advocate's fee rs. 150. 3......

Judgment:

ORDER

1. The relief prayed for in this writ petition with regard to the constitutional invalidity of clauses 2(iii)(a) and 2(viii) of Act 18 of 1985 is concluded by the decision of this Court in W.P. No. 841 of 1985 and batch, dated 3rd November, 1986 (Padmaja Commercial Corporation v. Commercial Tax Officer [1987] 66 STC 26) wherein it is held that the proceedings for levy of sales tax on works contract is valid.

2. The learned counsel for the petitioner however contends that the assessing authority issued a notice to the third party restraining them from paying the amount of Rs. 8 lakhs to the petitioner. It is not in dispute that either the provisional assessment or the assessment is not made as yet. Before making any provisional assessment, the respondent has no jurisdiction to call upon the third party to withhold the payment to the petitioner. In so far as the issuance of notice or a direction for withholding the payment is concerned, it is quashed. The assessing authority is not precluded from making provisional assessment or final assessment and take appropriate proceedings for recovery of the tax. The writ petition is partly allowed. No costs. Advocate's fee Rs. 150.

3. Writ petition partly allowed.