2015 (4) TMI 934 - HC - VAT and Sales Tax

Waiver of pre deposit - It is contended by the petitioner that the Tribunal has ignored from consideration the strong prima facie case in favour of the petitioner - O.C. Stamps were not affixed on Form E - Held that - petitioner has placed reliance on a Division Bench judgment of this Court reported in 2013 (6) TMI 28 - ALLAHABAD HIGH COURT Mawana Sugars Ltd. Vs. Deputy Commissioner, Commercial Tax and others. It is further contended that the petitioner is in debt to the tune of ₹ 66,78,59,922/- having taken loan from the District Co-operative Bank Ltd., Lakhimpur Kheri. As such the financial condition of the petitioner is not such that it may be able to deposit any amount. It is contended that the relevant facts for consideration of the application for waiver having not been considered, the impugned order suffers from non application of mind. It is further contended that the petitioner Co-operative society is managed and controlled by the State of U.P. and being its instrumentality, the Tribunal ought not to have insisted on deposit of any amount as a condition precedent for consideration of stay application. - Impugned order dated 29.8.2014 passed by the Tribunal is quashed - Decided in favour of assessee.

Summary

Issues:
1. Assessment under U.P. Tax on Entry of Goods into Local Areas Act, 2007.
2. Disputed tax liability and stay application.
3. Consideration of waiver application.
4. Financial condition of the petitioner.
5. Interpretation of Division Bench judgment.
6. Tribunal's order and direction for appeal decision.

Analysis:

1. The petitioner, a registered dealer under various tax acts, was assessed under the U.P. Tax on Entry of Goods into Local Areas Act, 2007, for the assessment year 2007-08. The assessment order required payment of a specified sum due to sales without O.C. Stamps to ex U.P. dealers, attracting entry tax.

2. The petitioner filed appeals against the assessment order, seeking a stay on the disputed tax liability. Various appellate authorities directed the petitioner to deposit percentages of the disputed amount as a condition for stay. The petitioner's financial burden, owing to a significant loan, was highlighted as a basis for waiver consideration.

3. The petitioner contended that a strong prima facie case existed in their favor, citing a Division Bench judgment supporting their stance. The financial strain due to a substantial loan was emphasized to argue against the deposit requirement for the stay application.

4. The financial condition of the petitioner, burdened by a loan of considerable magnitude, was a crucial factor in the waiver application and stay proceedings. The petitioner's inability to deposit the required amount was a significant consideration in the case.

5. The interpretation of a Division Bench judgment was pivotal in assessing the validity of the sales in question and the applicability of O.C. Stamps on Form E. The judgment's relevance to the current case was deliberated upon by both parties.

6. The Tribunal's order, directing the petitioner to deposit a specific percentage of the disputed tax liability for stay consideration, was challenged in the writ petition. The High Court quashed the Tribunal's order and directed an expeditious decision on the appeal, with a stay on recovery proceedings until the appeal's resolution, providing relief to the petitioner.