1970 (10) TMI 61 - HC - VAT and Sales Tax

Summary

Issues:
- Whether an appellate authority under the Punjab General Sales Tax Act, 1948 has the power to grant a stay in respect of the recovery of the amount of tax during the pendency of the appeal.

Analysis:
The case involved an appeal filed by the Excise and Taxation Commissioner and the District Excise and Taxation Officer against a judgment regarding the power of the appellate authority to grant a stay on tax recovery during an appeal. The main contention was whether the appellate authority had the power to grant a stay during the pendency of an appeal under sub-section (5) of section 20 of the Act. The appellants argued that no such power was vested in the appellate authority, while the respondents contended that the proviso to sub-section (5) indicated the existence of such power. The court noted that the appellate authority entertains an appeal only when proof of tax payment is provided, but the proviso allows for the authority to entertain an appeal even if the dealer is unable to pay the tax. The court concluded that the appellate authority, by using the power under the proviso, has the implied power to stay the recovery proceedings. Additionally, the court cited similar decisions from other High Courts to support the view that the power to stay recovery of tax is ancillary to the appellate power.

The court emphasized that the power to stay recovery of tax is ancillary or incidental to the appellate power, as seen in decisions from other High Courts. The court referenced a case from the Kerala High Court where it was held that the appellate authority has the power to stay proceedings pending appeal as incidental to its appellate jurisdiction. Moreover, the court highlighted a letter from the Excise and Taxation Officer stating that interim stay orders passed by appellate authorities are to be treated as vacated after 60 days. This indicated that the recovery proceedings were based on the expiry of the stay period rather than a lack of power of the appellate authority to grant a stay. The court found the conclusion of the learned Single judge to be unexceptionable and dismissed the appeal, affirming that the appellate authority is vested with the power to grant a stay on tax recovery during the appeal process.