1996 (6) TMI 342 - HC - VAT and Sales Tax

Summary

Issues:
1. Stay of collection of disputed tax for assessment years 1994-95 and 1995-96.
2. Interpretation of provisions under section 22(6) and 22(6-A) of the Andhra Pradesh General Sales Tax Act, 1957.
3. Exercise of discretion by the High Court in granting stay of recovery of tax.
4. Determining whether there has been a grave miscarriage of justice to grant direction not to recover tax due.

Detailed Analysis:
1. The petitioner filed civil miscellaneous petitions seeking a stay of the collection of disputed tax amounts for the assessment years 1994-95 and 1995-96. The petitioner argued that the provisional assessments were erroneous as the goods in question were washing machines with a micro processing system, which should have been treated as electronic goods for tax purposes, not electrical goods. The High Court was tasked with deciding on the stay of tax collection pending final hearing of the revision.

2. The Court analyzed the relevant provisions of the Andhra Pradesh General Sales Tax Act, specifically section 22(6) and 22(6-A). Section 22(6) mandates the payment of tax as per the assessment, with provisions for the petitioner to pay in instalments at the discretion of the High Court. On the other hand, section 22(6-A) states that the payment of tax and penalty shall not be stayed pending the disposal of the petition, but any excess tax paid shall be refunded if the revision results in a tax reduction.

3. The Court deliberated on the scope of the High Court's power to grant stay of tax recovery under section 22(6) and 22(6-A). It concluded that the High Court, in its discretion, may permit the petitioner to pay tax in instalments and give directions regarding tax payment, including the power to stay tax collection pending revision. However, this power should be sparingly exercised in special circumstances to prevent a grave miscarriage of justice, as observed in previous judgments.

4. In the present case, the Court examined whether there was a grave miscarriage of justice warranting a direction not to recover the tax due. After reviewing the assessments and decisions of the authorities, the Court found no evidence of miscarriage of justice or grave hardship to the petitioner. Consequently, the Court decided that it was not a fit case to grant a direction to entirely avoid tax recovery. Instead, the Court permitted the petitioner to deposit the tax due in two equal instalments to balance the interest of justice.

Overall, the judgment emphasized the discretionary power of the High Court in granting stays of tax recovery, highlighting the need for special circumstances to prevent miscarriages of justice while ensuring compliance with tax laws.