2002 (7) TMI 774 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to Trade Tax Tribunal's order dated June 28, 2002 for directions to continue the order dated September 27, 2001 and stay recovery of tax amount till March 25, 2002.

Analysis:
1. The petitioner, a public limited company, appealed assessment orders for the year 1997-98 under U.P. Trade Tax Act and Central Sales Tax Act. The Deputy Commissioner (Appeals) enhanced the tax liability, leading to a second appeal before the Trade Tax Tribunal, which partially allowed the appeal on September 27, 2001, directing a stay on 80% of the disputed tax under the Act and 70% under Central Sales Tax Act.

2. The petitioner filed a writ petition challenging the Tribunal's order dated September 27, 2001, which was dismissed by the High Court on March 21, 2002. The petitioner was required to deposit specific amounts of the disputed tax. Despite delays, the petitioner made various deposits towards the tax amount, leading to an application for condonation of delay in furnishing the security bond, which was dismissed by the Tribunal on June 28, 2002.

3. The Court referred to past judgments interpreting similar provisions, emphasizing that delay in filing security bonds could be condoned. Notably, the Court cited cases like Associated Cement Co. Ltd. v. Deputy Commissioner of Sales Tax (Appeals), Kanpur and Shree Vallabh Glass Works Ltd., Kanpur, highlighting the applicability of such interpretations to the present case.

4. Section 10(8) of the Act mandates furnishing adequate security within thirty days for a stay order to remain in force. The Court also referenced the case of Gramodaya Ashram, Ghazipur v. State of U.P., where delay in depositing a portion of the tax was condoned despite insufficient security, emphasizing the importance of considering the financial condition of the petitioner in such matters.

5. In conclusion, the Court set aside the Tribunal's order dated September 27, 2001, directing the assessing authority to accept the security without penalizing the petitioner. The Court also instructed the speedy resolution of the pending Second Appeals related to the case within six months, ultimately allowing the writ petition in favor of the petitioner.