2016 (1) TMI 49 - HC - VAT and Sales Tax

Recovery of tax when the appeal is pending before the appellate authority - deposit of 50% dues followed by Bank guarantee - Penalty - 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. The petitioner has also furnished bank guarantees for the balance tax amount and penalty wherever applicable for all the assessment years. 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, 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, this Court is of the view that the appeals are to be disposed of within a stipulated time and the recovery proceedings shall be kept in abeyance till the disposal of the appeals. - Petition disposed of.

Summary

Issues:
Issuance of Writ of Certiorarified Mandamus, Quashing of assessment orders, Stay applications and extensions, Recovery proceedings initiation, Disposal of appeals within stipulated time, Abeyance of recovery proceedings till appeal disposal.

Analysis:
The writ petitions sought a Writ of Certiorarified Mandamus to challenge assessment orders for various years and to quash them, requesting to prevent the first respondent from proceeding with any recovery until appeals were resolved. The petitioner had filed appeals with stay applications and had complied with the conditions set by the appellate authority, including payment of disputed tax amounts and furnishing bank guarantees. Stay orders were extended, but the petitioner faced the threat of recovery proceedings if stay extension orders were not obtained by a specified date. The High Court noted that the revenue department's interests were protected by the payments made and bank guarantees provided by the petitioner, and directed the appellate authority to dispose of the appeals within eight weeks. Until the appeals were resolved, no recovery proceedings were to be initiated against the petitioner, clarifying that the stay of original assessment orders would remain in effect during this period.

This judgment addressed the concerns raised by the petitioner regarding the impending recovery proceedings due to the expiration of stay orders and the need for stay extension. The Court emphasized the importance of resolving the appeals promptly and maintaining the status quo by keeping recovery proceedings on hold until the appeal disposal. The decision aimed to balance the interests of the petitioner and the revenue department by ensuring compliance with payment obligations while allowing for a fair resolution through the appeal process. The directive for the appellate authority to expedite the appeal disposal within a specified timeframe provided clarity and a structured approach to the resolution of the legal dispute, ultimately safeguarding the rights of the parties involved.