2014 (4) TMI 408 - HC - VAT and Sales Tax

Stay of Recovery proceeding - First Appeal pending - Disputed amount of tax - Judgment in M/s Food Corporation of India, Lucknow Vs. Commissioner of Commercial Tax Lko. and others 2009 (11) TMI 822 - ALLAHABAD HIGH COURT followed - On the basis of material on record, the recovery proceedings initiated against the revisionist for recovery of the disputed amount of tax shall remain stayed for a period of four months or till the decision taken by the First Appellate Authority filed by assessee u/s 9 of the U.P. Trade Tax Act, 1948, whichever is earlier - Revision is disposed of finally Decided in favour of Assessee.

Summary

Issues:
1. Challenge to the order passed by the Commercial Tax Tribunal.
2. Justification for not staying the entire recovery towards the deposited tax amount.
3. Comparison with legal precedents - Indian Oil Corporation Ltd. case and M/s Moriroku UT India Pvt. Ltd. case.
4. Arbitrariness of the impugned order.

The judgment dealt with a revision filed challenging the order passed by the Commercial Tax Tribunal under Section 11 of the U.P. Trade Tax Act, 1948. The revisionist, a Government Corporation, contested the Tribunal's decision not to stay the entire recovery of the disputed tax amount. The revisionist argued that the Tribunal's action was against established legal principles as per the Indian Oil Corporation Ltd. case and the M/s Moriroku UT India Pvt. Ltd. case. The revisionist claimed that the impugned order was arbitrary and should be set aside.

The Court referred to a previous judgment in a similar matter involving the Food Corporation of India, where recovery proceedings were stayed until the outcome of the appeal. Considering the facts and circumstances, the Court stayed the recovery proceedings against the revisionist for a period of four months or until the decision by the First Appellate Authority in the First Appeal filed by the applicant under Section 9 of the U.P. Trade Tax Act, 1948, whichever is earlier. The Court disposed of the revision with this observation.

In conclusion, the judgment addressed the challenge to the Tribunal's order, the issue of not staying the entire recovery of the tax amount, the comparison with legal precedents, and the claim of arbitrariness in the impugned order. The Court provided a temporary stay on the recovery proceedings pending the decision by the First Appellate Authority, following a similar precedent set in a previous case involving the Food Corporation of India.