1982 (1) TMI 183 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the Tribunal was justified in granting stay of only 50% of the tax in dispute.
2. Interpretation of sub-section (6) of section 10 of the U.P. Sales Tax Act regarding the Tribunal's discretion in granting stay.
3. The legal implications of the word "entertain" in the proviso to section 10(6) of the Act.
4. Competency of the revision against an order made under sub-section (6) of section 10 of the Act.

Detailed Analysis:
1. The primary issue in the case was whether the Tribunal was correct in granting a stay of only 50% of the tax in dispute instead of the entire amount. The applicant argued that the Tribunal was obligated to grant a stay of the entire amount as per the provisions of the U.P. Sales Tax Act. The Tribunal initially rejected the applicant's request for waiving the requirement of payment of one-third of the disputed tax but later rectified its order after considering special circumstances in favor of the dealer. The Tribunal then decided to stay 50% of the disputed tax amount, except for a specific case.

2. The interpretation of sub-section (6) of section 10 of the Act was crucial in determining the Tribunal's discretion in granting a stay of tax recovery. The section outlines the conditions under which the Tribunal may grant a stay, including the requirement of payment of one-third of the disputed amount. The applicant argued that once the Tribunal waived the payment requirement, it was obligated to grant a stay of the entire disputed tax amount. However, the court held that the language of the provision allowed the Tribunal discretion in deciding the extent of the tax recovery to be stayed during the appeal process.

3. The significance of the word "entertain" in the proviso to section 10(6) of the Act was also analyzed. The court referred to a previous Supreme Court decision to interpret the term, which indicated that the word "entertain" required fulfillment of conditions before considering a matter on its merits. Similarly, in the context of section 10(6), the legislature mandated the fulfillment of the payment requirement before the Tribunal could adjudicate on the stay request. The court emphasized that the grant of stay was not automatic and was subject to the conditions specified in the provision.

4. The issue of the competency of the revision against an order made under sub-section (6) of section 10 of the Act was raised by the standing counsel. It was argued that no revision was contemplated against such an order. However, the court did not delve into this aspect as it found that even on merits, the dealer's contention regarding the Tribunal's obligation to stay the entire disputed tax amount had to be rejected. The court concluded that the Tribunal had full discretion under sub-section (6) of section 10 to decide the extent of the tax recovery to be stayed, dismissing the revision accordingly.

In conclusion, the judgment clarified the Tribunal's discretion in granting stay of tax recovery, emphasizing the conditions laid down in the Act and rejecting the argument that the Tribunal was obligated to stay the entire disputed tax amount. The court highlighted the importance of interpreting legal provisions accurately and upheld the Tribunal's decision in granting a partial stay of the tax amount in dispute.