2018 (7) TMI 1889 - HC - VAT and Sales Tax

Grant of stay on collection of the disputed tax amount - Held that - The revisionary authority, at best, could have only considered the prima facie case made out by the assessee for seeking stay of payment of the disputed tax and could not have made observations on the merits of the matter. Such observations would invariably have a prejudicial effect upon the appellate authority who is subordinate in rank to the revisionary authority. We are therefore of the opinion that the impugned order suffers on counts more than one. When the petitioner concern already paid 12.5% of the disputed tax amount for the purpose of maintaining an appeal as required by law, it would be wholly unjust for the tax authorities to demand the balance of the disputed tax amount notwithstanding the pendency of the appeal. Petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Stay of collection of disputed tax amount pending appeal.
2. Refusal to grant stay by the revisionary authority.
3. Reliance on a Supreme Court judgment by the revisionary authority.
4. Payment of 12.5% of disputed tax amount by the petitioner.
5. Unjust demand of balance disputed tax amount by tax authorities.

Analysis:
1. The petitioner, a registered TOT dealer trading in paints, challenged the order refusing to grant a stay on the collection of the disputed tax amount pending appeal. The disputed tax amount related to a period between April 2012 to June 2016 under the Andhra Pradesh Value Added Tax Act, 2005. The petitioner sought a direction to prevent coercive recovery of the amount until the appeal was decided.

2. The petitioner had filed an appeal before the Appellate Deputy Commissioner and paid 12.5% of the disputed tax. However, the stay application for the remaining amount was denied by the revisionary authority, leading to the present challenge. The revisionary authority's decision was based on a Supreme Court judgment, which the petitioner argued was inapplicable due to factual distinctions.

3. The High Court noted that the revisionary authority erred in relying on the Supreme Court judgment without considering the petitioner's distinguishing factors. It was inappropriate for the revisionary authority to express opinions on the merits of the case while the appeal was pending before the Appellate Deputy Commissioner. Such actions could prejudice the appellate authority, which is subordinate to the revisionary authority.

4. The Court emphasized that the petitioner had already complied with the legal requirement by paying 12.5% of the disputed tax for the appeal. Therefore, demanding the balance amount during the appeal process was deemed unjust by the Court. The authorities were directed not to take coercive measures for collecting the balance disputed tax amount until the appeal was decided.

5. Ultimately, the writ petition was allowed, setting aside the impugned order and instructing the Commercial Tax authorities to refrain from coercive collection measures for the balance disputed tax amount. The Court ordered the closure of pending miscellaneous petitions in light of the final decision and made no ruling on costs.