1996 (2) TMI 484 - HC - VAT and Sales Tax

Summary

Issues:
1. Maintainability of the writ petition due to availing alternative remedy.
2. Validity of the impugned order staying recovery of a portion of the demand.
3. Consideration of disputed questions of facts in the writ petition.
4. Justification for staying only a portion of the penalty amount.
5. Applicability of rule 29 and discretion under section 11(3) of the RST Act.
6. Granting security for the penalty amount and disposal of the appeal within a fixed period.

Analysis:

Issue 1: Maintainability of the writ petition
The petitioner-company filed a writ petition challenging the demand notice and seeking directions for the pending appeal. The respondents contended that the petition was not maintainable as the petitioner had opted for an instalment facility for payment. The court noted that the alternative remedy had been availed of, but the maintainability of the writ petition was upheld due to the disputed questions of facts involved.

Issue 2: Validity of the impugned order
The impugned order stayed the recovery of a portion of the penalty amount, raising concerns about the discretion exercised under section 11(3) of the RST Act. The petitioner challenged the order as unwarranted and likely to influence the pending appeal. The court examined the order and found it reasoned, addressing objections raised, and not prejudicial to the petitioner's case before the appellate authority.

Issue 3: Consideration of disputed questions of facts
The writ petition involved disputed facts, including the stay of recovery and the pending appeal. The court considered the arguments of both parties and evaluated the impugned order to ensure fairness and adherence to legal provisions.

Issue 4: Justification for staying only a portion of the penalty amount
The court noted a contradiction in the impugned order where a partial stay was granted despite finding no prima facie case. The lack of clarity on reasons for the partial stay raised concerns about the decision-making process. Ultimately, the court decided to stay the entire penalty amount pending appeal disposal.

Issue 5: Applicability of rule 29 and discretion under section 11(3)
The court analyzed the references to rule 29 and the discretion exercised under section 11(3) of the RST Act. It clarified that the observations in the impugned order did not unduly influence the appellate authority and were made in consideration of the petitioner's submissions.

Issue 6: Granting security for the penalty amount and appeal disposal
The court directed the petitioner to provide security for the penalty amount and ordered the appeal to be disposed of within a fixed period. Additionally, the court outlined conditions for payment in instalments and withdrawal of attachment orders upon compliance.

In conclusion, the court partially allowed the petition, quashing the demand notice and providing detailed directions for the disposal of the appeal and payment of the outstanding amount, emphasizing a balance between taxpayer interests and revenue concerns.