2014 (12) TMI 1247 - HC - VAT and Sales Tax

Levy of entry tax on purchases of modem, GSM phones, data cards, scrap etc. and to entry tax under the provisions of U.P. Tax on Entry of Goods into Local Areas Act, 2007 on telecom goods, D.G. set, air conditioner, cable etc - Held that - the applicant has strong prima facie case and it is entitled to absolute stay during pendency of the appeal. In view of the above, the impugned order of the Tribunal dated 7.11.2014 is hereby set aside. It is further provided that there shall be complete stay during the pendency of the appeal. Since the revisionist is a Government Company, I am of the opinion that it is not required to furnish any security.

Summary

Issues:
1. Assessment of tax liability under U.P. Value Added Tax Act, 2008 and U.P. Tax on Entry of Goods into Local Areas Act, 2007 on various goods.
2. Granting of stay on disputed tax liability during pendency of appeal.
3. Consideration of prima facie case and legal precedents by the Tribunal.
4. Discrepancy in granting stay in similar cases for different assessment years.

Analysis:
1. The High Court dealt with the issue of tax liability under the U.P. Value Added Tax Act, 2008 and U.P. Tax on Entry of Goods into Local Areas Act, 2007 on purchases of telecom goods, D.G. set, air conditioner, cable, etc. The revisionist challenged the orders of the Assessing Authority holding them liable for tax on these items. The First Appellate Authority initially granted a stay of 60% on the disputed tax liability, which was later modified by the Tribunal to 20%. The revisionist contended that the demand had no legal basis citing relevant legal precedents.

2. The Court addressed the issue of granting stay on the disputed tax liability pending appeal. The revisionist argued that the Tribunal's order was a non-speaking order and failed to consider their strong prima facie case. The Court noted that the Tribunal did not adequately consider the revisionist's case and failed to provide reasons for not granting a complete stay. Relying on legal precedents and considering the financial hardship claimed by the revisionist, the Court held that the revisionist was entitled to absolute stay during the appeal, setting aside the Tribunal's order.

3. The Court analyzed the Tribunal's failure to consider the revisionist's prima facie case and legal precedents, such as the decisions of the Apex Court in relevant cases. It was observed that the Tribunal did not address the revisionist's arguments and did not provide a rationale for its decision. The Court, after reviewing the facts and legal principles, concluded that the revisionist had a strong prima facie case and should be granted complete stay during the appeal.

4. Another issue addressed was the discrepancy in granting stays in similar cases for different assessment years. The Court noted that in a previous case for the Assessment Year 2008-09, the revisionist was granted absolute stay, while in the present case for 2009-10, the Tribunal did not grant complete stay. The Court found this inconsistency and directed the appellate authority to decide the appeals promptly, preferably within two months from the date of the order.

In conclusion, the High Court allowed both revisions, directing the appellate authority to expedite the appeal process and granting the revisionist complete stay on the disputed tax liability without the need for security due to its status as a Government Company.