1990 (6) TMI 209 - HC - VAT and Sales Tax

Summary

Issues:
- Correctness, legality, and propriety of the order passed by the Commissioner of Sales Tax, Orissa, regarding the application for stay of realisation of extra demands of sales tax.
- Consideration of non-taxability of the transaction and desirability of granting full stay.
- Adequacy of consideration of financial hardship faced by the petitioner.
- Requirement of positive findings by the Commissioner while considering the stay application.
- Need for rehearing the matter by the Commissioner to ensure interest of justice.

Analysis:
The three writ applications before the Orissa High Court involved a Government of India undertaking challenging the order passed by the Commissioner of Sales Tax, Orissa. The petitioner sought a stay of realisation of extra demands of sales tax for the assessment years 1984-85 and 1986-87. The Full Bench of the Orissa Sales Tax Tribunal had upheld the tax levy on the petitioner, who then moved the Commissioner for stay, claiming non-taxable receipts and inapplicability of the Act. The Commissioner permitted payment in instalments, which the petitioner contested, arguing for a full stay based on financial distress. The Court noted that the Commissioner did not adequately address the non-taxability argument and financial hardship faced by the petitioner, as required by legal precedent. The Court emphasized the need for the authority to consider prima facie case, balance of convenience, and financial capability while deciding on stay applications.

The Court highlighted that the Commissioner's order lacked positive findings on crucial aspects, such as financial hardship and non-taxability, necessitating a fresh hearing by the Commissioner to ensure justice. The petitioner was given the opportunity to submit additional applications elaborating on the grounds of challenge and relevant factors. As an interim measure, the petitioner was directed to deposit a specified sum, and any attachment orders were to remain inoperative until the Commissioner's reconsideration. The original order of the Commissioner was deemed inoperative due to the directive for rehearing. The Court emphasized the importance of a thorough consideration of all relevant factors in stay applications involving financial distress, especially for a Government undertaking.

In conclusion, the Court disposed of the writ applications, directing the Commissioner to rehear the matter with a focus on the petitioner's financial hardship and the prima facie case presented. The Court's decision aimed to ensure that justice was served by considering all essential factors and legal precedents in the context of granting stays on tax demands.