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sreedhar (advocate)     04 August 2009


A company is due to pay sales tax to another Co. (B) for items purchased during 2004. Since it is a statutory payment, the Company B itself pays the tax to the Govt and later claims from Company A. Company A admits its liablility to pay the amount during 2006 but fails to repay. After several reminders by Company B, it makes an interim payment during 2007. For the balance outsanding amount Comapny B has issued legal notice to Company A during 2009. What is the law of limitation in this case. Whether money suit could be filed or is it barred by limitation. Suggest about the casue of action in this matter.


 4 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     04 August 2009

Sreedhar garu,

Vigilantibus non dormantibus jura subvenient" means "The law helps those who are vigilant and not those who sleep over their rights".

The law of limitation is an exhaustive code. It does not create rights. It only bars the remedy. The act does not revive barred rights.

KOUSIK ANANDA GURU (LAWYER)     05 August 2009

As the B company has made the last payment in 2009 after admiting its due in 2006 and 2007, suit can be filed for recovery of the dues

Deekshitulu.V.S.R (B.Sc, B.L)     07 August 2009

Mr Sreedhar

Certainly the suit will be in time. You have to refer to Sec. 19 and 20 etc of the NI Act. From a reading of your query, it is clear that there were payments during 2005 ,2006 and 2007. Interim payment after reminder is almost all an acknowledgment as contemplated under law.

Hence do not waste time on query and proceed legally.

Dharmesh Manjeshwar (Advocate/Lawyer)     07 August 2009

If U have written confirmation that the interim payments in 2007 were made against the items purchased during 2004, then limitation gets extended/starts afresh for another 3 years .... limitation for filing recovery suits being 3 years .... Ur case is not time barred if and only if there is written confirmation from Co. B.

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