2015 (9) TMI 44 - HC - VAT and Sales Tax

Stay of Payment of Tax Revisionist preferred first appeal and also filed application seeking stay of payment of disputed tax in its entirety Appellate authority disposed of stay application by permitting assessee to deposit only 50 per cent of disputed tax however, Tribunal modified first appellate authority s order and stayed 75 per cent of disputed tax Whether revisionist was entitled for complete stay of deposit amount Held that - Tribunal neither considered prima facie merits of revisionist case nor has taken into account financial distress of revisionist in payment of disputed tax amount and other relevant factors Therefore, order of Tribunal is unreasoned and appears to have been passed in routine and casual manner Impugned order of Tribunal cannot be sustained and is set aside Matter remanded for afresh consideration , on merits in accordance with law Decided in favour of Revisionist.

Summary

Issues:
Assessment order stay application - Disputed tax payment - First appellate authority's decision - Tribunal's modification of order - Lack of reasons in orders - Apex court's decision in Pennar Industries Ltd. v. State of A. P. - Need for reasons in granting stay - Unreasoned Tribunal order - Remand for fresh decision.

Analysis:
The revision stemmed from an assessment order dated May 15, 2013, where the revisionist sought a stay on payment of disputed tax after the first appellate authority allowed depositing only 50% of the tax, staying the remaining 50%. Subsequently, the Tribunal modified this, requiring the revisionist to deposit 25% of the disputed tax and furnish security for the remaining 75% within 30 days. The counsel for the revisionist argued that as per the decision in Pennar Industries Ltd. v. State of A. P., the appellate authority must provide reasons if not granting complete stay, emphasizing the importance of reasoned decisions to avoid adverse consequences on the assessee. The counsel also cited relevant local court decisions supporting this stance.

Upon review, the learned standing counsel acknowledged the absence of reasons in the orders of the first appellate authority and the Tribunal for not granting complete stay to the assessee. The High Court scrutinized the orders and noted that the Tribunal failed to consider the merits of the revisionist's case or the financial distress in paying the disputed tax, rendering the Tribunal's decision unreasonable and seemingly casual. Consequently, the Court found the Tribunal's order unsustainable, especially in light of the legal precedents cited, and set it aside.

As a result, the High Court allowed the revision, remanding the matter for a fresh decision on the revisionist's appeal, emphasizing the need for a reasoned consideration of the case, including the merits and financial circumstances, in line with the law. The Court's decision highlighted the importance of providing adequate justification for decisions impacting the payment of disputed taxes to ensure fairness and compliance with legal standards.