2012 (3) TMI 377 - HC - VAT and Sales Tax

Conditional stay order - order issued by the appellate authority directing payment of 4 lakhs and furnishing of security for the balance amount as condition for staying recovery of Kerala value added tax - Held that - Unable to uphold the appellant s contention that a revision under section 57 is maintainable against conditional stay order issued by the Deputy Commissioner under section 55(4) of the Kerala Value Added Tax Act.The only remedy available is judicial review under articles 226 and 227 of the Constitution of India before the High Court. So much so the revision filed by the appellant against the conditional stay orders issued by the Deputy Commissioner (Appeals) before another Deputy Commissioner is misconceived and is not tenable as the Deputy Commissioner has no jurisdiction. So far as the demand of 4 lakhs as condition for stay is concerned we feel some quantum reduction can be granted considering the financial difficulty expressed by the appellant. We accordingly modify the judgment of the learned single judge and exhibit P13 conditional stay order by reducing the payment to 3 lakhs. We accordingly issue a direction to the assessing officer to conduct an inspection of the shop and prepare an inventory so that if any controversy arises after disposal of products factual position will be on record on request by the appellant.

Summary

Issues:
Challenge against conditional stay order under Kerala Value Added Tax Act - Maintainability of revision petition against conditional stay order - Jurisdiction of Deputy Commissioner under sections 55(4), 55(5), 57, 58, 59, and 60 of the Act - Availability of statutory remedy against conditional stay orders - Judicial review under articles 226 and 227 of the Constitution of India - Discretionary remedy exercised by appellate authority - Reduction of payment amount for stay - Conducting inspection by assessing officer.

Analysis:
The judgment of the court addressed the issue of the maintainability of a revision petition against a conditional stay order issued by the Deputy Commissioner of Commercial Taxes (Appeals) under the Kerala Value Added Tax Act. The court clarified that revisions under section 57 are essentially against non-appealable orders or orders without specific appeal provisions. The demand for tax and interest is based on assessment, appealable under section 55, with the appellate authority empowered to issue stay orders subject to conditions. Orders under section 55(5) are appealable to the Tribunal, but conditional stay orders are not. The Act provides no statutory remedy against such orders, leaving judicial review under articles 226 and 227 as the only recourse, as revisions before the Deputy Commissioner are limited to orders of lower authorities.

The court also considered the discretionary remedy exercised by the appellate authority, emphasizing that interference by the High Court requires a showing of jurisdictional issues or arbitrariness. In this case, the appellant faced challenges due to market conditions affecting their business, prompting a request for inspection to avoid assessment controversies. The court directed the assessing officer to conduct an inspection upon the appellant's request to document the inventory for potential future disputes. Additionally, the court modified the payment amount for stay from Rs. 4 lakhs to Rs. 3 lakhs, considering the appellant's financial difficulties, with a deadline set for payment and a directive for the appellate authority to resolve the appeals promptly.

In conclusion, the writ appeal was disposed of by modifying the judgment of the single judge, reducing the payment amount for stay and directing the assessing officer to conduct an inspection while underscoring the limited statutory remedies against conditional stay orders and the necessity of judicial review for challenging such decisions under the Kerala Value Added Tax Act.