2013 (12) TMI 386 - SC - VAT and Sales Tax

Demand of tax - Rectification application under Section 66 - Admissibility of appeal - Division Bench while modifying the order of the learned Single Judge directed that unless the modified conditions are complied with the appeal would not be disposed of - Held that - condition imposed by the Division Bench is against the language of the provision relating to appeal. If the conditions imposed by the Division are not complied with, the appeal would have meet its own fate, but the High Court could not have directed in law that unless the conditions are satisfied, the appeal shall not be heard. It is not permissible - time for payment and furnishing security has expired, we extend the time till end of December, 2013 to deposit the amount as directed by the Division Bench and furnish the security as directed therein within the said period - Decided partly in favour of assessee.

Summary

Issues:
1. Challenge to assessment order for the year 2010-11.
2. Challenge to assessment order for the year 2009-10.
3. Legality of conditions imposed by Division Bench for appeal disposal.

Analysis:
1. The appellant challenged the assessment order for the year 2010-11, directing payment of tax amounting to Rs.87,24,895/-. The appellant filed a statutory appeal along with an application for stay and urgent hearing. The High Court granted a stay on recovery of tax subject to the appellant remitting one-third of the amount demanded and furnishing security for the balance. The Single Judge directed the appeal to be disposed of within three months. The Division Bench modified the conditions, requiring the appellant to remit specific amounts by certain dates and furnish security. The appellant contended that the conditions imposed by the Division Bench were contrary to the provision of appeal under Section 55 of the K.V.T. Act.

2. The assessment order for the year 2009-10 was also challenged by the appellant, leading to a rectification application under Section 66 of the K.V.T. Act. The High Court directed the respondent to pass an order on the rectification application within two weeks. Subsequently, the appellant filed a statutory appeal with an application for stay and urgent hearing. During the pendency of the appeals, the tax authority initiated proceedings and issued demand notices. The appellant filed a writ petition seeking a stay on proceedings based on assessment orders. The Single Judge granted a stay on recovery of tax, subject to certain conditions, and directed the appeal to be disposed of within three months. The Division Bench modified the conditions set by the Single Judge.

3. The Division Bench imposed conditions on the appellant for appeal disposal, requiring specific payments and security to be furnished by certain dates. The appellant argued that such conditions were against the language of the provision relating to appeal under the K.V.T. Act. The Supreme Court analyzed the relevant provisions and found that the conditions imposed by the Division Bench were impermissible. Consequently, the Supreme Court modified the conditions, extending the time for payment and furnishing security. The appellate authority was directed to dispose of the pending appeals by a specified date.

In conclusion, the Supreme Court modified the conditions imposed by the Division Bench for appeal disposal, extending the time for compliance and directing the appellate authority to dispose of the pending appeals promptly.