2010 (6) TMI 723 - HC - VAT and Sales Tax

100 per cent stay of the recovery of disputed tax for the assessment year of 2009-10 (third quarterly) till the disposal of the first appeal claimed Held that - The learned counsel for the revisionist failed to point out any jurisdictional error in the order passed by the second appellate court in favour of the revisionist itself while recovery of tax up to 90 per cent has been stayed. In the facts and circumstances of the case, this court is of the view that no interference in revisional jurisdiction is required in the impugned order.

Issues:
1. Stay of recovery of disputed tax for the assessment year of 2009-10
2. Delay in filing the first appeal and condonation of the delay
3. Jurisdictional errors in the orders of the appellate courts
4. Compliance with section 55(3) and (6) of the U.P. Value Added Tax Act, 2008
5. Financial position of the assessee/appellant and interest of the State in revenue collection

Stay of Recovery of Tax:
The revisionist filed a revision seeking 100% stay of the recovery of disputed tax for the assessment year of 2009-10. The assessing authority imposed a tax liability of Rs. 2,05,74,974, leading to a first appeal being filed challenging the ex parte assessment order. The first appellate court stayed 70% of the recovery, which was later enhanced to 90% by the Tribunal. The revisionist, dissatisfied with this, filed the current revision seeking 100% stay. The High Court noted that the first appeal was still pending and suggested that the revisionist could have sought an enhancement of the stay percentage before the first appellate court instead of filing a revision.

Delay in Filing Appeal and Condonation:
The appeal was time-barred, and an application to condone the delay was submitted. The High Court observed that until the delay was condoned, it was improper to pass a stay order without admitting the appeal for hearing. The court emphasized the importance of the first appellate court assessing whether a strong prima facie case was made out in favor of the appellant before granting a stay of recovery during the appeal process. The High Court directed the first appellate court to expedite the disposal of the appeal, ensuring compliance with section 55(6) and confirming the deposit of ten percent of the assessed tax for the appellant to proceed with the appeal.

Jurisdictional Errors and Compliance with Section 55(3) and (6):
The High Court found no jurisdictional error in the orders of the appellate courts. However, it highlighted that the first appellate court and the Tribunal did not adequately consider the pre-conditions of section 55(3) and (6) before granting the stay of recovery. The courts focused on the financial position of the appellant without giving due consideration to the interest of the State in revenue collection. The High Court stressed the need for a balanced approach considering both the appellant's financial capacity and the State's revenue interests.

Financial Position of the Assessee and State's Interest:
The High Court emphasized that the financial capacity of the assessee is not the sole criteria for granting a stay or waiver of pre-deposit. It noted that the courts should also consider whether the disputed tax is payable or being paid, and whether the appellant has fulfilled the pre-conditions of the relevant Act. The High Court directed the first appellate court to ensure a thorough examination of compliance with section 55(6) and the deposit requirements before proceeding with the appeal.

In conclusion, the High Court dismissed the revision, suggesting that the revisionist could have sought an increase in the stay percentage before the first appellate court. The court directed the first appellate court to promptly dispose of the appeal, ensuring compliance with the statutory provisions and deposit requirements for the appellant to proceed with the appeal process.

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