2001 (10) TMI 1108 - HC - VAT and Sales Tax

Summary

Issues:
Petitioner seeks direction to quash order rejecting application for recovery of demand pending appeal.

Analysis:
The petitioner, a construction company, deposited Rs. 90,000 towards a demand of Rs. 1,73,565, leaving a disputed balance of Rs. 83,565. The petitioner appealed under section 84(7) of the Rajasthan Sales Tax Act, 1994 and applied for stay under section 42(4), which was rejected by the Deputy Commissioner without giving reasons, leading to the current writ petition.

The petitioner's counsel argued that the rejection order lacked reasons, citing precedents that mandate recording reasons for such rejections. The respondent's counsel contended that under the new Act, recording reasons for rejecting stay applications is not mandatory. The court noted that while the Act doesn't explicitly require reasons, passing arbitrary orders is unacceptable. The court emphasized that giving reasons is essential for natural justice, even if not detailed, to show application of mind and fair hearing.

The court found the rejection order whimsical and arbitrary, emphasizing that statutory powers must not be exercised cavalierly. Referring to apex court decisions, the court stressed that interim relief in tax matters should be cautiously granted, considering public revenue. The court highlighted the importance of judicial scrutiny in stay applications affecting state revenue and individual rights, cautioning against routine grant of stays without exceptional reasons.

Consequently, the court allowed the writ petition, setting aside the Deputy Commissioner's order and directing a fresh order after hearing the petitioner's counsel. An interim order was extended till a specified date for further proceedings before the appellate authority.

This judgment underscores the importance of reasoned decisions in tax matters, emphasizing fair hearings, judicial scrutiny, and cautious grant of interim relief affecting public revenue and individual rights.