2014 (4) TMI 641 - HC - VAT and Sales Tax

Condition of Pre-deposit - Interim stay during the pendency of the appeal Held That - It is brought to the notice that, the matter was considered by the appellate authority and Ext.P5 order dated 01.10.2013 was passed - The assessment has been modified and the matter stands remitted back to the assessing authority, to be reconsidered, virtually accepting the contention put forth assessee - It is the very same officer who has passed Ext.P9 order on 10.03.2014, imposing a condition, which is rather an onerous one - The said order is stated as a mechanical one, in so far as the position of law declared by the binding judicial precedents has not been referred to and the Officer has not even referred to Ext.P5, his own order in respect of the previous assessment year - In view of the course ordered by the Division Bench of this court as per Ext.P4, also in the light of Ext.P5, the fifth respondent is directed to pass final orders in Ext.P7 series - The writ petition is disposed of Decided in favour of assessee.

Summary

Issues:
1. Condition imposed by the fifth respondent in Ext.P9 interim order
2. Nature of transaction and liability imposed on the petitioner
3. Previous assessment year and appellate proceedings
4. Mechanical imposition of conditions without considering judicial precedents
5. State's second appeal against Ext.P5 order
6. Directions for final orders in Ext.P7 series appeals

Analysis:

1. The petitioner challenged the condition imposed by the fifth respondent in the Ext.P9 interim order, requiring the petitioner to satisfy 25% of the outstanding demand by a specified date to avail the benefit of interim stay during the appeal's pendency. The petitioner contended that the condition was onerous and not in line with the relevant provisions of law, as the transaction in question was a service and not a sale, as per judicial precedents.

2. The petitioner argued that Ext. P6 series of assessment orders imposed a substantial liability despite the nature of the transaction being a service, not subject to tax under the KVAT Act based on legal precedents. The petitioner had filed Ext.P7 series of appeals with stay applications, leading to the issuance of the contested Ext.P9 order without proper consideration of facts and legal provisions.

3. In relation to the previous assessment year, the petitioner had pursued legal remedies through Writ Petition and subsequent Writ Appeal, resulting in the appellate authority modifying the assessment and remitting the matter back for reconsideration. However, the same officer issued the Ext.P9 order without referencing the previous order or judicial pronouncements, leading to the challenge.

4. The court noted the need for a final decision in light of the Division Bench's order in Ext.P4 and the modified assessment in Ext.P5. The court directed the fifth respondent to issue final orders in Ext.P7 series appeals within two months, considering the law and providing the petitioner with a hearing opportunity, while staying coercive proceedings during this period.

5. The learned Government Pleader informed the court about the State's second appeal against the Ext.P5 order, indicating ongoing legal actions related to the matter.

6. The judgment concluded by instructing the petitioner to provide a copy of the judgment and writ petition to the fifth respondent for further action, disposing of the writ petition and setting a timeline for the final decision on the pending appeals.