The Hindu : Karnataka / Bangalore News : Cough up dues, court tells Sanjay Khan’s resort

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Cough up dues, court tells Sanjay Khan’s resort

Staff Reporter

World Resorts filed an appeal against a single judge dismissing its claim for tax relief
Resort’s claim for extending benefits of the Tourism policy rejected

BANGALORE: The Karnataka High Court has directed World Resorts Limited, of which Hindi film actor and producer Sanjay Khan is one of the directors, to deposit part of the tax it owes to the Government if it wanted its appeal against a single judge order to be heard.

World Resorts had filed an appeal against a single judge order of November 28, 2007 levying costs of Rs. 1 lakh on it and dismissing its claim for tax relief.

The company, in its appeal, said it had petitioned a single judge for staying the notices issued to it 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 also remarked 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 and eight others, filed an appeal against this order. They claimed that the single judge had erred in not staying the notices issued to them 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 extending to it the benefits. 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.

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.

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

When the matter came up, a Division Bench comprising Justice V. Gopala Gowda and Justice L. Narayanaswamy informed the company that they would hear the petition only if they deposited the balance amount and adjourned further hearing on the case.

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