RATHNA BAR AND RESTAURANT Vs. COMMERCIAL TAX OFFICER

JUDGEMENT

(1.) VALIDITY of the Notification dated March 31, 1998 has been assailed in this writ petition. The main ground which is taken is, that, it is not based on the anticipatory tax liability but the classification of the dealers have been made according to the nature of category of trade they are carrying on. A particular restaurant may be having a good turnover while the others may not even be able to have the turnover of even 10 per cent of the security amount demanded. Under section 10a (4) of the Karnataka Sales Tax Act, power to demand the security is given, but under the proviso, in respect of different categories of dealers in liquor or beer, the State Government has been conferred with power to fix the amount of security to be demanded from the dealers. This proviso is not taken care of the anticipatory tax liability for which security could be demanded. The amount of security could be under Section 10a (4) (b), equal to one half of the tax anticipated to be payable by the dealer for that year. Since the proviso to Section 10a (4) have to be read along with 10a (4) (b), the security cannot exceed one half of the anticipated liability of tax. The notification which has been issued, classified retail dealer, wholesale dealer, hotels and bars with different securities. In the notification, a retail dealer has been made liable to make the deposit of Rs. 75,000 irrespective of the tax liability. The first petitioner has the total tax liability of Rs. 16,680 in the year 1997-98 and the second petitioner's liability was only Rs. 13,892.

(2.) SO far as the challenge by the third petitioner--The Karnataka Wine Merchants Association is concerned, it may be observed that, the writ petition is not maintainable on behalf of the association. Neither the list of the members has been submitted nor any resolution authorising any person to file the petition on behalf of the association has been submitted. The members of the association are not from the weaker sections of the society and as such, the petition to that extent is not maintainable.

(3.) SO far as the petitioners 1 and 2 are concerned, the controversy in this regard was considered in W. P. No. 15741 of 1998 decided on June 30, 1998. The proviso to Section 10a (4) (a) confers the powers on the State Government for fixing the amount of security. The Notification dated march 31, 1998, issued, is therefore, within the power conferred by the proviso. It is no doubt true that in fixing the amount of security, the anticipated liability of tax has to be kept in view, but, this has been done making the categorisation of the dealers, viz. , retail dealers, hotels, bars and pubs, etc. , on the basis of the population in the city or other Corporation. It may be that, in the City Corporation, having the population of 20 laks and above, the security of Rs. 75,000 which is demanded in some cases be excessive while in others, it may be lesser but it is only the estimate which has been made by the State Government of the anticipated tax liability. There may be number of factors in considering the anticipatory tax liability and then the information provided by the department is also one of the relevant factors. In certain cases, the amount of security, demanded may be very high, but for that reason, notification cannot be considered to be ultra vires the power or as non-application of mind with regard to anticipatory tax liability. The population is one of the relevant factors, on the basis of which, the amount of anticipatory tax liability is fixed. The State Government cannot examine the case of each and every individual assessee with regard to their liability. In these circumstances, I feel that the notification cannot be considered bad in law. A copy of this order be sent to the Commissioner who may issue a circular to the assessing authorities to inform the Commissioner with regard to monthly payment of tax of each of the liquor dealers for one year and thereafter, the State Government may consider the refixation of the amount of security. If it is found that the security amount is not in accordance with the figures available with the department. This would also ensure the department for prompt realisation of tax dues. Writ petitions are disposed of accordingly.