1998 (12) TMI 574 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of tax demand notice dated November 26, 1998.
2. Interpretation of section 19(2-C) of the Andhra Pradesh General Sales Tax Act, 1957.
3. Continuation of stay on disputed tax pending disposal of appeals.
4. Requirement of specific order for extension of stay by the Joint Commissioner.
5. Legality of tax recovery in absence of extended stay.

Analysis:

1. The petitioner challenged a tax demand notice dated November 26, 1998, demanding Rs. 3,81,636 for the year 1992-93 as illegal and violative of section 19(2-C) of the Andhra Pradesh General Sales Tax Act, 1957. The respondent contended that since no stay was in operation, the disputed tax was payable.

2. The petitioner was assessed to sales tax for the year 1992-93, and after various appeals and orders, the tax liability was reduced to Rs. 3,81,636. The petitioner argued that the stay on tax payment should continue until the disposal of the second appeal by the Sales Tax Appellate Tribunal, citing section 19(2-C) of the Act.

3. The petitioner's appeal to the Sales Tax Appellate Tribunal was pending, and it was contended that the stay granted during the first appeal should automatically extend to the second appeal. However, the department argued that the stay under section 19(2-B) would not be operative during the second appeal unless specifically extended by the Joint Commissioner.

4. The petitioner claimed entitlement to the benefit of stay pending appeal, irrespective of the Joint Commissioner's extension under section 19(2-C). The court clarified that a specific order of extension by the Joint Commissioner was necessary for the stay to continue till the disposal of the second appeal.

5. The court held that without an extension of stay by the Joint Commissioner under section 19(2-C), there was no bar to tax recovery. The impugned demand notice was deemed legal, but the petitioner was given the option to apply for stay extension, with proceedings for recovery kept on hold for two weeks to facilitate the application process. Ultimately, the writ petition was dismissed, subject to the mentioned observations.