2015 (12) TMI 423 - HC - VAT and Sales Tax

Stay application - Recovery proceedings - Enforcement of bank guarantee - Held that - Petitioner has paid 25% of the disputed tax for the respective assessment years at the time of filing the appeals. Further, as directed by the Appellate authority, the petitioner also made payment of another 25% of the disputed amount. Further, the petitioner has also furnished bank guarantees for the balance tax amount and penalty wherever applicable for all the assessment years and they are still in force till March 2016. However, according to the learned counsel for the petitioner, the extension of stay petitions filed by the petitioner were not heard. In the meantime, on 08.10.2015, the 1st respondent herein issued a notice directing the petitioner to produce stay orders for the assessment years in question, in the absence of which, recovery action will be initiated. Since the revenue of the department is very much safeguarded by remitting 50% of the disputed tax for all the assessment years as well as furnishing bank guarantee for the remaining 50% of the disputed tax and penalty wherever applicable, which are still in force till March 2016, this Court is of the view that till final orders are passed in the appeals, the recovery proceedings shall be kept in abeyance. - Stay granted.

Summary

Issues:
Petitioner seeks a writ of mandamus to prevent recovery action pending appeal disposal.

Analysis:
The petitioner challenged assessment orders for various years and filed appeals with stay applications, complying with conditions imposed by the appellate authority. Despite readiness to complete appeals, they remain pending. Stay orders were extended until 23.10.2015, but recovery action was threatened before final appeal orders. The petitioner requested no coercive steps until stay extension decisions, but the 2nd respondent indicated no further extensions. The petitioner paid disputed taxes, furnished bank guarantees, and filed stay extension applications, which were not heard. The 1st respondent issued a notice for stay orders, threatening recovery without them. The court noted the petitioner's compliance with conditions safeguarding revenue and directed the 1st respondent to halt recovery proceedings until final appeal orders are issued.

The writ petitions are disposed of, directing the 1st respondent to refrain from recovery actions until the 2nd respondent issues orders in the pending appeals. The stay of assessment orders will remain until appeal disposal. No costs are awarded, and connected miscellaneous petitions are closed.