1990 (1) TMI 283 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the order requiring specific security for stay petition.
2. Jurisdiction of assessing authority in considering stay applications.
3. Legality of the order returned by the appellate authority.

Analysis:
1. The writ petition challenged an order by the Deputy Commercial Tax Officer requiring the petitioner to offer security in the form of immovable property or a bank guarantee for a stay petition. The court held that Rule 31 of the Tamil Nadu General Sales Tax Rules, 1959, does not mandate such specific security conditions. Rule 31(1) allows for personal or property security or a bank guarantee at the discretion of the authority handling the appeal or revision. The court deemed the order unsustainable due to the lack of statutory basis for the specific security requirements imposed.

2. Rule 31(2) stipulates that security orders must be issued by the authority handling the appeal or revision before the applicant furnishes security to the assessing authority. The court emphasized that the assessing authority cannot independently consider stay applications; only the appellate authority can direct the nature of security required. It clarified that the assessing authority's role is limited to receiving security after an order is issued by the appellate authority. The judgment highlighted the interconnectedness of Rule 31(1) and (2) in the process of furnishing security for stay petitions.

3. The court addressed an order from the Appellate Assistant Commissioner, Commercial Taxes, directing the petitioner to file a security bond before the assessing officer, contrary to the rules. Despite this order being issued after the impugned order, the court found it necessary to ensure compliance with the law. It asserted that the appellate authority must specify the form of security required before the assessing authority can accept it. The judgment emphasized that the assessing authority lacks jurisdiction to consider stay applications and cannot delegate this function to others. It concluded by issuing a writ of mandamus for the proper consideration of the petitioner's stay application in accordance with the law.

In summary, the judgment primarily focused on the procedural aspects of security requirements for stay petitions under the Tamil Nadu General Sales Tax Rules, emphasizing the roles of the appellate and assessing authorities in the process. It clarified the statutory framework governing the furnishing of security and directed the proper handling of the petitioner's stay application by the appellate authority.