2017 (4) TMI 1303 - HC - VAT and Sales Tax

Recovery of balance of disputed tax till disposal of appeal - Held that - appeals having not been disposed of within a period of one (1) year from the date on which it was filed and interim orders were granted, no fault could be laid at the doors of petitioner since such delay was not on account of petitioner seeking time or adjournments having taken place at the behest of petitioner - this Court is of the considered view that ends of justice would be met if a direction is issued to the Tribunal to dispose of the appeals within a time-frame and also directing the respondents authorities not to precipitate the matter by taking recourse to recovery proceedings from recovering disputed tax - petition disposed off.

Summary

Issues:
1. Challenge to rejection of request for stay of recovery of disputed demands.
2. Non-disposal of appeals within one year from the date of interim stay order.
3. Petitioner's contention of irreparable loss and hardship if recovery of disputed tax is allowed.
4. Direction sought for quashing the recovery proceedings and ensuring justice.

Analysis:

Issue 1:
The petitioner, a registered dealer under the CST Act, challenged the rejection of the request for stay of recovery of disputed demands by the respondent under Section 63(7)(b) of the KVAT Act. The rejection was based on the provision that if an appeal is not disposed of within 365 days from the grant of the stay order, the stay would not stand extended. The petitioner approached the High Court challenging this rejection.

Issue 2:
The Appellate Tribunal failed to dispose of the appeals within one year from the date of the interim stay order granted on 18.04.2016. Despite the petitioner paying 30% of the disputed tax and furnishing bank guarantees, the tribunal did not meet the deadline for disposal. The petitioner highlighted the delay and sought relief to prevent irreparable loss and hardship due to potential recovery of the disputed tax.

Issue 3:
The petitioner's counsel argued that the petitioner had a strong case on merits before the Tribunal. Any recovery of the disputed tax would cause irreparable loss and hardship. Therefore, the counsel requested the quashing of the recovery proceedings to protect the petitioner's interests and ensure justice.

Issue 4:
Considering the circumstances and the delay in disposing of the appeals, the High Court directed the Tribunal to expedite the disposal of the appeals within a timeframe. The Court emphasized that the delay was not due to the petitioner's actions and issued a directive to the authorities not to initiate recovery proceedings for the disputed tax until the appeals were resolved. This direction was based on a previous order by a Coordinate Bench of the Court in a similar case.

In conclusion, the High Court granted relief to the petitioner by directing the Appellate Tribunal to dispose of the appeals promptly within three months. The Court also instructed the authorities not to proceed with recovery actions until the appeals were resolved, ensuring justice and preventing irreparable loss to the petitioner.