Observing that the law does not permit payment of tax in instalments, a Division Bench of the Madras High Court has reversed an order passed by its single judge permitting Empee Distilleries, which supplies liquor to Tamil Nadu State Marketing Corporation (Tasmac), to pay tax arrears of over ₹34 crore to the Commercial Taxes Department in five instalments.
Allowing a writ appeal preferred by the Commissioner of Commercial Taxes, a Division Bench of Justices S. Manikumar and R. Suresh Kumar said: “Statute does not provide payment of tax in instalments, therefore the respondent (Empee Distilleries) has no right to seek for payment of tax in instalments.”
The judges said the distillery, which holds a licence to manufacture 4.19 lakh cases of liquor every month, had suppressed the fact of having collected Value Added Tax from Tasmac, the wholesale purchaser of the liquor, but did not remit the amount to the Commercial Taxes department within the stipulated time.
Pointing out that this was not the first time that a single judge of the High Court had permitted the distillery to remit the tax arrears in instalments, the Division Bench recalled that another single judge of the High Court had given a similar concession to it early this year with a rider that no such indulgence shall be granted in future.
Stating that the distillery had suppressed the text of that order, the Bench led by Mr. Justice Manikumar said: “Remedy under Article 226 (power of the High Courts to issue writs) of the Constitution of India is equitable and not to be extended to a person who has suppressed material facts and approached the court with unclean hands.”
