1999 (9) TMI 926 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the High Court has the power to grant stay of collection of disputed tax and penalty pending disposal of a revision petition under Section 22 of the Andhra Pradesh General Sales Tax Act, 1957.
2. Interpretation and relative scope of sub-sections (6) and (6-A) of Section 22 of the APGST Act.
3. Legislative intent and purpose behind the introduction of sub-section (6-A).

Issue-Wise Detailed Analysis:

1. Power of the High Court to Grant Stay:
The core question addressed is whether the High Court is empowered to grant stay of collection of disputed tax and penalty pending disposal of a revision petition under Section 22 of the APGST Act, 1957. The judgment clarifies that the High Court does not have the power to grant such a stay due to the explicit prohibition in sub-section (6-A). The Court concluded that the phrase "give such other direction in regard to the payment of tax as it thinks fit" in sub-section (6) should not be interpreted to include the power to stay the collection of tax, as this would conflict with the clear legislative intent expressed in sub-section (6-A).

2. Interpretation and Scope of Sub-sections (6) and (6-A):
The judgment delves into the interpretation of sub-sections (6) and (6-A) of Section 22. Sub-section (6) allows the High Court to permit the petitioner to pay the tax in instalments or give other directions regarding the payment of tax. However, sub-section (6-A), introduced by the APGST Amendment Act of 1985, explicitly states that the payment of tax and penalty due according to the order of the Appellate Tribunal shall not be stayed pending the disposal of the revision petition. The Court emphasized that both provisions must be read together and harmoniously, with sub-section (6-A) taking precedence over the broader interpretation of sub-section (6).

3. Legislative Intent and Purpose of Sub-section (6-A):
The Court examined the legislative intent behind the introduction of sub-section (6-A), which was to restrict the power to grant stay of collection of disputed tax or penalty in tax revision cases by the High Court. The legislative policy aimed to ensure that the collection of tax is not postponed for an unduly long time, especially after the assessment has been scrutinized by a judicial body like the Tribunal. The Legislature intended to remove legal hurdles for the realization of tax after the Tribunal's decision, balancing the interests of revenue with the potential success of the assessee in the revision petition. The provision for payment of interest on refunds under Section 33-F was noted as a measure to mitigate the prejudice to the assessee.

Conclusion:
The Court concluded that the High Court does not have the power to grant stay of recovery of tax or penalty pending a revision under Section 22(1) of the APGST Act. The Court may, however, permit the petitioner to pay the tax in instalments or give other directions of a limited nature that do not amount to granting a stay. The judgment affirmed the view taken in C.M.P. No. 17575 of 1992 in T.R.C. No. 78 of 1992 and overruled the decisions in Bharath Litho Press and BPL Ltd. The reference was answered in favor of the Revenue, and the TRCs and stay petitions were directed to be placed before the regular Tax Bench for determination according to law.