Avinash Azad
In a striking disclosure made on the final day of the Jammu & Kashmir Legislative Assembly session, the government acknowledged that over ₹409 crore in sales tax arrears remain unrecovered from 2,527 defaulters across the Union Territory—despite repeated legal notices, property attachments, and arrest warrants.
The revelation came in response to a starred question by BJP MLA Ranbir Singh Pathania, who demanded year-wise sales tax collections and details of major defaulters whose dues remain unpaid despite multiple reminders.
Sales Tax Collections in Decline
According to the government’s reply, total sales tax receipts collected in the last two financial years have slightly declined: “The sales tax collected in UT of Jammu and Kashmir is ₹1,605.89 Crores in 2023–24 and ₹1,642.55 Crores in 2024–25 under the J&K (Motor Spirit and Diesel Oil) (Taxation on Sales) Act, SVT 2005 (1948 A.D). ₹3.83 Crores in 2023–24 and ₹2.56 Crores in 2024–25 were collected under the J&K General Sales Tax Act, 1962.”
The majority of the receipts are from tax on petrol, diesel, ATF, and natural gas, while collections under the General Sales Tax Act are minimal—largely comprising pending arrears, as sales tax is no longer applicable on commodities under the outdated 1962 law.
2527 Dealers Owe Over ₹409 Crores
In response to MLA Pathania’s query on defaulters, the government submitted that a total of 2,527 dealers across J&K have defaulted on sales tax, with the cumulative outstanding amount ballooning to:
– ₹179.39 Crores in Principal Tax
– ₹193.30 Crores in Interest
– ₹36.62 Crores in Penalties
– Total: ₹409.31 Crores
While the government called this a “gist of voluminous data,” it stopped short of publicly naming the top defaulters or disclosing their locations, citing the bulk nature of the records.
Thousands of Recovery Notices, Arrest Warrants Issued
The reply, however, emphasized that recovery action is underway. According to the figures tabled in the House, the Tax Department has stepped up enforcement under both the J&K General Sales Tax Act, 1962 and the J&K Land Revenue Act:
-3,556 Notices issued
-790 Attachment Notices served on immovable/movable assets and bank accounts
-408 Property Attachment Orders executed
-762 Warrants of Arrest under Land Revenue Act issued to defaulters
Monitoring is reportedly being conducted at both divisional and UT levels, involving Additional Commissioners, Deputy Commissioners, and the Commissioner of State Taxes.
Growing Tax Arrears Raise Accountability Questions Despite these figures, critics argue that the massive backlog of unpaid taxes points to structural inefficiencies and weak enforcement. Tax experts note that in most advanced systems, defaulters are publicly named and their assets auctioned after a fixed period of non-compliance—measures rarely enforced in J&K.
