2014 (8) TMI 23 - HC - VAT and Sales Tax

Stay application - Penalty - Assessee contends that orders of assessment were passed on a mistaken impression with regard to certain slips - Held that - Under normal circumstances, the appellant should have gone only before the appellate authority. As against the order impugned in the Writ Petition, the appellant has a statutory remedy of appeal to the Appellate Assistant Commissioner. But, he had come out with a Writ Petition and the Writ Petition has been entertained. Therefore, under normal circumstances, we would not interfere with the exercise of a discretion by the learned Judge in imposing a condition upon the appellant for the deposit of the amount - explanation of the appellant needed to be taken care of. The products in question sold by the appellant were only two wheelers. These products cannot escape unnoticed as they require registration. Therefore, in cases of this nature, the condition, that would normally apply in similar cases, need not be insisted upon - Decided in favour of assessee.

Summary

Issues:
1. Imposition of a condition for payment of a specific amount for granting interim stay of an order.
2. Validity of revised orders of assessment under the Tamil Nadu Value Added Tax Act, 2006.
3. Appellant's challenge against the condition imposed by the learned Judge.
4. Appellant's contention of non-application of mind and arbitrariness in the impugned order.
5. Appellant's statutory remedy of appeal to the Appellate Assistant Commissioner.
6. Consideration of the appellant's explanation regarding the products in question.
7. Modification of the order by the High Court.

Analysis:
1. The High Court dealt with an appeal arising from an interim order that imposed a condition of payment of Rs. 15,00,000 for granting an interim stay of an order passed by the respondent. The appellant challenged this condition, arguing that the orders of assessment were based on a mistaken impression regarding certain slips, which, according to the appellant, did not involve suppression. The appellant contended that the entire order was flawed due to non-application of mind and arbitrariness.

2. The respondent had issued a pre-revision notice under the Tamil Nadu Value Added Tax Act, 2006, based on an inspection in 2012. After a personal hearing, revised orders of assessment were issued, demanding significant amounts towards tax and penalty. The appellant filed a Writ Petition challenging these revised orders, leading to the interim stay condition.

3. The High Court acknowledged that normally, the appellant should have pursued the statutory remedy of appeal to the Appellate Assistant Commissioner instead of filing a Writ Petition. However, the Court considered the appellant's explanation regarding the products sold, which were two-wheelers requiring registration, and concluded that the usual condition for deposit need not be insisted upon in this case.

4. Consequently, the High Court modified the order, reducing the deposit amount to Rs. 7,00,000 and setting a deadline for deposit. If the amount was not deposited by the specified date, the interim stay would automatically be vacated. The Writ Petition was directed to be posted for hearing after completion of notice service, and no costs were awarded in the matter.