1997 (2) TMI 534 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Vires of section 20(5) of the Punjab General Sales Tax Act and section 39(5) of the Haryana General Sales Tax Act.
2. Appellate authority's discretion to grant stay based on prima facie merits of the appeal.
3. Conditions for entertaining appeals under the Punjab and Haryana Acts.
4. High Court's power to grant stay under Article 226 of the Constitution of India.

Summary:

1. Vires of Section 20(5) of the Punjab Act and Section 39(5) of the Haryana Act:
The judgment upheld the vires of section 20(5) of the Punjab General Sales Tax Act and section 39(5) of the Haryana General Sales Tax Act. The court stated, "The right of appeal is a creature of a statute, and the Legislature could impose conditions for exercise of such a right. Neither there is a constitutional nor legal impediment for imposition of such a condition."

2. Appellate Authority's Discretion to Grant Stay Based on Prima Facie Merits of the Appeal:
The court rejected the argument that the appellate authority should consider the prima facie merits of the appeal when granting a stay. It was noted, "Neither on the wording nor in view of the spirit of the Punjab and Haryana Acts it is possible to hold that the appellate authority should see the prima facie nature of the case while hearing the stay matter."

3. Conditions for Entertaining Appeals Under the Punjab and Haryana Acts:
The court emphasized that appeals under section 20(5) of the Punjab Act and section 39(5) of the Haryana Act cannot be entertained without the payment of the tax amount unless the appellate authority is satisfied that the dealer is unable to pay the amount. The court stated, "The appeal is a creation of a statute and in case a person wants to avail of the right of appeal, he has to accept the conditions imposed by the statute."

4. High Court's Power to Grant Stay Under Article 226 of the Constitution of India:
The court acknowledged that the High Court has the power to grant stay under Article 226 of the Constitution in rare cases. It held, "The High Court in exercise of its jurisdiction under article 226 of the Constitution of India in rarest of the rare cases in the given facts and circumstances, can grant stay and waive the condition of pre-deposit of tax."

Conclusion:
The reference was answered against the assessee, and all writ petitions were dismissed. The court concluded, "The factum of tax assessed being illegal cannot be a relevant consideration for grant of stay by an Appellate Authority."