(2011) 39 VST 102 (All.) Shiv Nath Singh Yadav v. Assistant Controller (Grade I)/Sub-Divisional Magistrate, Bharatana and Ors. Trade tax — Recovery of tax — Limitation — When no time limit prescribed, recovery to be within reasonable time — Recovery proceedings taken twenty years after date of recovery certificate unreasonable.

The petitioner, represented by his widow, was in arrears of sales tax dues for assessment years 1972- 1973 to 1975-1976 for which recovery certificate was issued on 16th February, 1985. After 20 years, the Sales Tax Officer wrote a letter dated August 20, 2004 to The Deputy Post Master, for payment of balance dues of Rs.755498, which includes interest payable till 26th August, 2004, from the petitioner’s P. O. Monthly Scheme Accounts,. The asseessee filed writ petition before the High Court against issue of recovery certificate.

Held:

(1) When no time limit is prescribed for recovery of dues, the State is also expected to be vigilant and to make the recovery of its dues from whatever means or manner within the time-frame. Considering the limitation of 12 years for instituting of suit relating to immovable property, a period of 12 years from the date of issuance of recovery certificate can be constructed to be a reasonable period for recovery of dues, though not as an absolute rule. But, the period of 19 years is certainly not a fair and reasonable time.

(2) Considering facts of the case, the High Court issued direction to the sales tax authority to prepare statement of account showing the principal amount of tax due with interest and payment thereof, etc. In preparing statement of account no interest on interest accrued shall be charged and further no interest even on the principal amount, if any, after 12 years of issuance of recovery certificate shall be levied. Any excess amount recovered shall be refunded with interest at the same rate at which it has been charged. The deficient amount, if any, as per the statement shall be recovered from the petitioner only after affording opportunity of hearing to her subject to the satisfaction that she has inherited property in excess of the amount now sought to be recovered as the balance.