2014 (10) TMI 23 - HC - VAT and Sales Tax

Imposition of condition pertaining to deposit - Bank guarantee - Held that - Along with the appeals, the petitioner has paid 25% of the disputed tax. Pending appeals, the petitioner has sought for an order of interim stay. By separate orders passed in each of the appeals, the Appellate Deputy Commissioner directed the petitioner to pay another 25% of the disputed tax and to furnish bank guarantee for the remaining tax amount as well as for the entire penalty amount - petitioner therein to pay another 25% of the disputed tax and also directed to execute personal bond for 50% of the disputed tax and for the entire penalty amount within a time frame. However, For the balance 50% of the disputed tax and entire penalty amount, the petitioner shall execute a personal bond, on or before 31.07.2014 - Decided partly in favour of assessee.

Summary

Issues:
Challenge to impugned orders on grounds of violation of Articles 14 and 19 of the Constitution of India regarding deposit amount and bank guarantee conditions.

Analysis:
The petitioner filed Writ Petitions seeking to quash the impugned orders of the respondent, which required the deposit of specific amounts and furnishing of bank guarantees. The petitioner contended that these conditions were violative of Articles 14 and 19 of the Constitution of India. The orders in question pertained to assessment years 2006-07 to 2010-11, where the petitioner had already paid 25% of the disputed tax while filing statutory appeals. However, the Appellate Deputy Commissioner imposed additional conditions, requiring the petitioner to pay another 25% of the disputed tax and furnish bank guarantees for the remaining tax and penalty amounts. The petitioner found these conditions onerous and approached the court through the Writ Petitions.

In a similar case, the court had previously directed another petitioner to pay an additional 25% of the disputed tax and execute a personal bond for 50% of the disputed tax and the entire penalty amount within a specified timeframe. Following this precedent, the court in the present case issued an order directing the petitioner to pay another 25% of the disputed tax by a specific date and execute a personal bond for the remaining 50% of the disputed tax and the entire penalty amount by the same deadline. The court emphasized the need for expeditious disposal of the appeals and required the petitioner's cooperation for the same. It was clarified that compliance with these conditions would result in an interim stay pending the disposal of the appeals.

Consequently, the court modified the orders of the respondent and disposed of the Writ Petitions based on the conditions outlined in the order. The connected Miscellaneous Petitions were closed, and no costs were awarded in this matter.