1993 (3) TMI 323 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to the reopening of assessment under the CST Act.
2. Appeal against the revised order of assessment.
3. Seeking stay of recovery proceedings pending appeal before the Appellate Tribunal.
4. Jurisdiction of the Appellate Tribunal to grant interim relief.

Analysis:

1. The petitioner, an assessee under the Kerala General Sales Tax Act and the Central Sales Tax Act, challenged the reopening of assessment under the CST Act for the assessment year 1984-85. The Deputy Commissioner, in a suo motu revision, concluded that the petitioner was not entitled to the exemption under a specific notification. The petitioner appealed this decision before the Sales Tax Appellate Tribunal (Appellate Tribunal) under section 39 of the KGST Act. However, before the appeal could be filed, a revised order of assessment was made, demanding further payment. The petitioner sought a stay on the recovery proceedings pending the appeal.

2. The Appellate Assistant Commissioner did not dispose of the appeal or the stay application, leading the petitioner to file a writ petition under Article 226 of the Constitution seeking a stay. The petitioner argued that the Appellate Tribunal lacked the power to grant interim relief, leaving him with no statutory forum for such relief. The court examined whether the Appellate Tribunal had the authority to stay recovery proceedings pending the appeal.

3. Section 39 of the KGST Act provides for an appeal to the Appellate Tribunal against orders passed by the Deputy Commissioner in suo motu revision. The court noted that the Tribunal had the discretion to give directions regarding payment of disputed tax, subject to sufficient security being furnished. The proviso under this section empowered the Tribunal to stay recovery of the tax due pending the appeal, as the tax amount had been determined based on the order under challenge.

4. The court emphasized that the Appellate Tribunal, with its wide appellate powers, could pass interim orders necessary for the interests of justice. It cited precedents where appellate bodies were deemed to possess inherent powers to grant stays as incidental to their appellate jurisdiction. The court held that the Tribunal had the authority to stay recovery proceedings after a remit, even before the completion of the revised assessment. The petitioner was directed to approach the Tribunal for necessary orders, and the recovery proceedings were stayed for six months.

In conclusion, the court dismissed the writ petition, granting the petitioner time to seek interim relief from the Appellate Tribunal.