2020 (3) TMI 1424 - HC - VAT and Sales Tax

Validity of assessment order - liability of the petitioner towards VAT and penalty arrived at by the Assessing Authorities under the Telangana VAT Act, 2005 - HELD THAT - Since the petitioner had already paid 12.5% or more of the disputed tax pending appeals before the Appellate Deputy Commissioner and the Telangana VAT Appellate Tribunal, we are of the considered opinion that the respondents are not justified in refusing to grant the petitioner stay of collection of the balance disputed tax and issuing Garnishee orders to the petitioner s banker for recovery of the balance disputed tax. Petition allowed.

Summary

Issues Involved:
Challenges to VAT and penalty assessments for specific years; petitioner's liability under Telangana VAT Act, 2005; dispute over the balance disputed tax; refusal of stay by authorities; issuance of Garnishee orders for recovery.

Analysis:

Assessment Years 2012-13:
The writ petitions pertain to the assessment years 2012-13, 2014-15, and 2015-16, concerning the petitioner's VAT liability and penalties determined by the Assessing Authorities under the Telangana VAT Act, 2005. The assessments are under challenge before the Appellate Deputy Commissioner and the Telangana VAT Appellate Tribunal. The petitioner had already deposited 12.5% of the disputed tax in matters before the Appellate Deputy Commissioner and 50% in cases before the Tribunal pending appeal.

Refusal of Stay and Garnishee Orders:
Despite the petitioner's partial payments, the authorities rejected the petitioner's requests for a stay on the balance disputed tax. The authorities even issued Garnishee orders to the petitioner's banker under Section 29 of the Act for recovering the remaining disputed tax. The petitioner cited a Division Bench order that deemed it unjust for tax authorities to demand the balance disputed tax when a portion had already been paid for maintaining an appeal as required by law.

Legal Precedents and Confirmation:
The petitioner's argument drew support from a Division Bench order and a subsequent confirmation by the Supreme Court in a related case. The Special Government Pleader for Commercial Taxes acknowledged the principles established in these cases.

Court's Decision and Orders:
Considering the petitioner's payments and the legal precedents, the Court found the authorities unjustified in denying the petitioner a stay on the balance disputed tax and issuing Garnishee orders for recovery. Consequently, the Court allowed all the writ petitions, setting aside the orders related to the disputed tax amounts for each assessment year. No costs were awarded in any of the cases, and pending miscellaneous petitions were to be closed.

This comprehensive analysis outlines the issues involved in the judgment, the legal arguments presented, the Court's decision, and the resulting orders in each specific instance, ensuring a detailed understanding of the case.