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World Resorts appeals against tax order

Staff Reporter

A single judge order levied costs of Rs. 1 lakh on it

BANGALORE: World Resorts Ltd., of which Hindi film actor and producer Sanjay Khan is one of the directors, on Friday filed an appeal in the Karnataka High Court against a single judge order levying costs of Rs. 1 lakh on it and dismissing its claim for tax relief.

On November 28, a single judge had come down heavily on the World Resorts Ltd., and directed the State Government to inquire into the conduct of some officials responsible for not realising Rs. 20.3 crore tax which was due from the company to the State.

Notices

The company said it had petitioned the single judge for staying the notices issued by the Department of Commercial Tax for collection of tax for 2002-03 and 2003-04. The single judge had not only dismissed the petition but said that “there appears to be collusion between some officials and the company and that this had led to non-realisation of the tax amount”.

World Resorts, of which Mr. Sanjay Khan is one of the directors along with his wife, Zarine Khan and daughter Farah Khan and eight others had filed an appeal against the single judge order.

They said the single judge had erred in not staying the notices issued to them by the Department of Commercial Tax under Section 14 of the Karnataka Sales Tax and under Section 8 A of the Luxury Tax.

In its notices, the department said it was rejecting the resort’s claim for the benefits of the Tourism policy.

Challenging these notices before the court, World Resorts said it had set up a Rs. 145 crore centre at Nagarur village, Dasanapura hobli off Tumkur Road on the outskirts of Bangalore.

It said it had shown interest in setting up the project in Karnataka after the State came up with a tourism policy on May 30, 1992.

The State had subsequently issued an order prescribing certain guidelines for the companies to claim benefits under the tourism policy.

World Resorts said it was incorporated as a company based in Bangalore on April 27, 1995.

It said on October 27, 2003, it made an application to the then Chief Minister, requesting him to consider its plea for deferring the collection of luxury tax and sales tax.

However, on October 30, 2003, the Assessing Authority issued notices under the Sales Tax Act asking it to pay sales tax arrears for 2002-03 and 2003-04.

Communication

On May 5, 2004, World Resorts said, it received a communication from the office of the then Chief Minister saying that its plea for benefits under the tourism policy was under consideration.

On June 23, 2004, the company made gave a similar representation to the Deputy Chief Minister and the Finance Minister.

The Assessing Authority on July 30, 2004 once again issued notices to it under the provisions of the Sales Tax Act and Luxury Act.

On February 8, 2005, the State intimated to World Resorts that its claim for benefits under the tourism policy was rejected.

On November 30, 2005, the Commercial Tax Department issued “Ganishee” notices and seized the company’s bank accounts.

The company then moved the High Court for relief. It said it was filing the appeal after a single judge had rejected its contention and also levied costs.

A Division Bench headed by Justice V. Gopala Gowda adjourned hearing on the case.

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