1998 (9) TMI 618 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of appellate power under section 24 of the Karnataka Sales Tax Act, 1957 regarding the inherent power to stay the operation of the order appealed against.

Analysis:
The judgment delves into the interpretation of appellate power under section 24 of the Karnataka Sales Tax Act, 1957, specifically focusing on the inherent power to stay the operation of the order appealed against. The bone of contention revolves around sub-section (6) of section 23 of the Act, which has been incorporated into section 24 of the Act by operation of sub-section (4) of section 24. The court refers to a Supreme Court case where the nature of appeal provisions under the Customs Act, 1962 was examined, emphasizing that the right to appeal is a conditional statutory right circumscribed by the conditions set by the legislature. The judgment highlights the statutory provisions under sections 20, 22, and 23 of the Act, outlining the conditions and limitations imposed on the appellate authorities regarding the power to grant stay of the impugned order.

The court rejects the contention that sub-section (6) of section 23 merely reiterates the liability of the assessee to pay tax, emphasizing that the statutory provisions do not vest an inherent power in the court to grant a stay of the impugned order. It is noted that the appellate authorities, including the High Court and the Appellate Tribunal, are not empowered to stay the operation of the impugned order outright but have discretion to give directions regarding the payment of tax based on prescribed conditions. The judgment cites precedents and observations from previous cases to support the conclusion that the power to grant stay of recovery proceedings is regulated by specific statutory provisions and is not an absolute right.

In light of the above analysis and the scheme of the Act of 1957, the court concludes that there is no inherent power vested in the High Court to stay the impugned order while exercising its appellate jurisdiction under section 24 of the Act. The court dismisses the applications for stay of the impugned order in the appeals, emphasizing that arguments of extreme hardship cannot be sustained based on previous Supreme Court observations. The judgment clarifies that the power to grant stay on terms exists but is subject to stringent conditions to prevent unfettered disruption to government revenue collection.

Overall, the judgment provides a detailed analysis of the statutory provisions, legal precedents, and the limitations on the appellate authorities' power to grant stay of the impugned order under the Karnataka Sales Tax Act, 1957, ultimately leading to the dismissal of the applications for stay in the appeals.