1989 (4) TMI 326 - HC - VAT and Sales Tax

Summary

Issues:
Interpretation of the time limit for furnishing security under Section 9 (3-A) (iii) of the U. P. Sales Tax Act for maintaining a stay order.

Analysis:
The judgment involves a revision against the Sales Tax Tribunal's decision rejecting the appeal of the assessee for the assessment year 1983-84. The assessee, a registered dealer under the U. P. and Central Sales Tax Acts, was engaged in the sale of paper and paperboard. The Assistant Commissioner made a best judgment assessment, which led to an appeal by the assessee before the Deputy Commissioner (Appeals) Sales Tax Allahabad. Along with the appeal, the assessee applied for staying the tax realization and waiving the deposit requirement. The Deputy Commissioner partly allowed the stay application, and the assessee furnished security within 30 days from the service of the stay order. However, a subsequent order was passed against the assessee for not furnishing security within 30 days from the order's passing, leading to further appeals and ultimately reaching the High Court.

The main issue addressed in the judgment is the interpretation of the time limit for furnishing security under Section 9 (3-A) (iii) of the U. P. Sales Tax Act. The section states that no stay order shall remain in force for more than 30 days unless the appellant furnishes security within that period. The dispute arose regarding whether the 30-day period should be counted from the date of passing the order or the date of service of the order on the assessee. The counsel for the revenue argued that the period starts from the order's passing, while the counsel for the assessee contended it should start from the date of service on the assessee. The court analyzed the language of the section and concluded that the 30-day period should commence from the date of service on the assessee. As the assessee had indeed furnished security within 30 days from the service date, the court held that the Tribunal's decision was erroneous and directed the appellate court to accept the security as deposited on time.

In conclusion, the High Court allowed the revision, set aside the Tribunal's order, and directed the appellate court to accept the security furnished by the assessee within the stipulated time frame. The court emphasized that the 30-day limit for security deposition should be calculated from the date of service of the order on the assessee, not from the date of the order's passing. Each party was instructed to bear its costs, and a copy of the order was to be sent to the Tribunal as per the Act's requirements.