2017 (3) TMI 1342 - HC - VAT and Sales Tax

Imposition of condition of stay - Held that - This Court in M/s.Mangalam Foundation s case 2017 (3) TMI 1296 - MADRAS HIGH COURT has given an option to the assessees to furnish a personal bond, where 50% of the disputed tax has been paid - the impugned order is modified to the extent that instead of furnishing a Bank Guarantee, the petitioner would place on record a personal bond for the balance amount of disputed tax and penalty, within two (2) weeks from the date of receipt of a copy of the order - petition allowed - decided partly in favor of petitioner.

Summary

Issues:
- Imposition of conditions of stay pending appeal
- Disputed tax quantification and penalty imposition
- Payment made by the petitioner
- Requirement of Bank Guarantee for balance tax and penalty
- Petitioner's plea for modification of the order
- Government Advocate's submission on modifying the order
- Court's consideration of past cases for similar situations
- Modification of the impugned order to allow a personal bond instead of Bank Guarantee

Imposition of Conditions of Stay Pending Appeal:
The petitioner challenged the order imposing conditions of stay pending disposal of the appeal, which quantified the disputed tax at ?3,02,561/- and sought a penalty of ?1,36,061/- on the petitioner. The petitioner had already made payments during assessment and appeal stages, with an additional payment of ?75,640/- via Demand Draft. The first respondent demanded the balance disputed tax and penalty of ?2,22,344/- in the form of a Bank Guarantee, leading to the petitioner's grievance.

Requirement of Bank Guarantee for Balance Tax and Penalty:
The petitioner contested the onerous condition of providing a Bank Guarantee for the outstanding tax and penalty. The petitioner sought modification of the order based on a previous judgment in a similar case, emphasizing the undue burden imposed by the current requirement.

Court's Consideration and Modification of the Order:
The Court considered past cases, including M/s.Mangalam Foundation's case and another similar case, where an option was given to furnish a personal bond when 50% of the disputed tax had been paid. In line with this approach, the Court modified the impugned order. The petitioner was directed to submit a personal bond for the balance amount of disputed tax and penalty within two weeks. Upon furnishing the personal bond, a stay was granted on the Order-in-Original pending the appeal with the first respondent.

Conclusion:
The writ petition was disposed of with the aforementioned directions, resulting in the closure of the pending application without any costs. The Court's decision to allow a personal bond instead of a Bank Guarantee provided relief to the petitioner and aligned with the principles established in previous judgments for similar situations.