2016 (1) TMI 47 - HC - VAT and Sales Tax

Stay application - short payment of VAT - imported goods were held to be not accounted for - Held that - We do not find that the Tribunal s order raises any substantial question of law. The discretion has been exercised reasonably and not arbitrarily or capriciously. The principles which are laid down in the decision of M/s Banara Valves Ltd. have been thus applied. If the order passed by the Tribunal is discretionary and it has adverted to necessary and requisite materials, then, we do not find that it has in any manner brushed aside the legal principles. Whether the assessment made by the Assessing Officer is correct or not will have to be decided by the 1st Appellate Authority at the hearing of the Appeal. The Appellant will get opportunity to place relevant facts, figures and materials before the Authority at that time. However, there can not be and in the peculiar facts and circumstances an unconditional stay of recovery of taxes. That is how the rights and equities have been balanced by the Tribunal. - Decided against assessee.

Summary

Issues:
Challenge to order of Maharashtra Sales Tax Tribunal on pre-deposit amount.

Analysis:
The appellant challenged the order of the 5th Bench of the Maharashtra Sales Tax Tribunal, which directed a pre-deposit of Rs. 22,00,000. The appellant argued that the Tribunal did not consider relevant factors, such as the circumstances leading to the assessment order in the absence of the appellant due to personal difficulties. The appellant's contention was that the order was based on the manager's knowledge during a period of personal hardship, resulting in the assessment of higher tax, penalty, and interest. The 1st Appellate Court imposed a pre-deposit condition of Rs. 25,46,131, assuming the correctness of the assessing officer's order without adequately considering the appellant's situation.

The appellant relied on two Supreme Court judgments emphasizing the need for a basis or material before passing an assessment order and fair consideration of business dealings by the assessing authority. The Tribunal reduced the pre-deposit amount to Rs. 22,00,000 but the appellant argued it was still unmanageable. The High Court found that the Tribunal's exercise of discretion was reasonable, considering the principles laid down in the Supreme Court decision regarding the assessment of income based on unaccounted imports. The High Court held that the Tribunal did not ignore legal principles and balanced the rights and equities by not granting an unconditional stay of tax recovery.

The High Court concluded that the Tribunal's order did not raise any substantial question of law and was not contrary to legal principles. The appellant's argument that there was adequate material to guide the Appellate Authority in granting a stay pending appeal was also dismissed. The High Court upheld the Tribunal's decision, emphasizing the need for the appellant to present relevant facts and materials during the appeal hearing before the 1st Appellate Authority.