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2013 (3) TMI 230 - HC - VAT and Sales TaxApplication for interim relief - Stay granted to the extent of 55% of tax liability - Held that - As decided in I.T.C. Ltd. vs. Commissioner (Appeals), Custom & Central Excise, Meerut-I 2003 (10) TMI 70 - HIGH COURT OF JUDICATURE AT ALLAHABAD while considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must apply its mind as to whether the appellant has a strong prima facie case on merit. Keeping in view the settled position of law on the point in issue and from the perusal of the appellate order passed by the appellate tribunal thereby passing the impugned orders, the said authorities have not indicated its mind so far as the existence of the prima facie case on merits on appeal as well as the financial condition which are to be considered by them while passing the impugned orders on an application for stay pending in the first appeal. The said mandatory condition is to be taken into consideration while disposing of an application for interim relief moved by the assessee by the appellate authority as well as tribunal during the pendency of appeal.
Issues Involved:
1. Stay of tax liability pending appeal before the appellate authority. 2. Consideration of financial condition and prima facie case for granting stay. 3. Application of legal principles for granting interim relief. Issue 1: Stay of Tax Liability Pending Appeal The petitioner filed a first appeal against the assessment order for the year 2008-2009 and sought a stay on the tax liability. The appellate authority granted a stay for 55% of the tax liability, leading to a challenge by the petitioner before the Tribunal, which was dismissed. Subsequently, the petitioner filed a revision before the High Court seeking a stay on the tax liability pending the appeal. Issue 2: Financial Condition and Prima Facie Case The petitioner argued that their financial condition was precarious, and there existed a prima facie case in their favor. Citing legal precedents, the petitioner contended that the Court should consider whether the appellant has a strong prima facie case on merit before deciding on a stay. The petitioner emphasized that undue hardship would be caused if required to deposit the tax amount during the pendency of the appeal. Issue 3: Application of Legal Principles The High Court considered the arguments presented by both parties and referred to previous judgments to analyze the situation. The Court noted that the case of the petitioner aligned with the legal principles discussed in the cited judgments. Consequently, the High Court directed the first appellate authority to decide on the appeal within two months and ordered that the petitioner need not deposit the tax amount for a period of two months or until the appeal decision, whichever is earlier. In conclusion, the High Court disposed of the revision by granting the petitioner relief from depositing the tax amount until the first appeal decision is made, taking into account the financial condition and the existence of a prima facie case in favor of the petitioner. The judgment highlighted the importance of balancing the rights of the individual and the State in matters of tax liability pending appeal, in line with established legal principles.
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