2017 (12) TMI 629 - HC - VAT and Sales Tax

Maintainability of appeal- whether against the impugned order, an appeal is maintainable under Section 27 of the MVAT Act, 2002? - Held that - In the present case, the order impugned has been passed on the application for stay made by the petitioner in the pending appeals. While deciding such application, no issue could be finally decided or concluded and only a prima facie consideration of the controversy involved in the appeal is required to be made with a view to ascertain whether the appellant has made out a prima facie case - Sub-section (1) of Section 27 of the said Act of 2002, on the face of it gives an impression that an appeal will lie to this Court from every order passed by the Tribunal on a substantial question of law. The Division Bench considered the view taken by the Apex Court and Delhi High Court in certain other cases and came to the conclusion that against a procedural order or an interlocutory order which does not affect the rights and liabilities of the parties, an appeal will not be maintainable under sub-section( 1) of Section 20 as the word order will not include an interlocutory or a procedural order which does not decide the rights between the parties. Petition disposed off.

Issues:
1. Interpretation of Section 27 of the Maharashtra Value Added Tax Act, 2002 regarding the maintainability of an appeal against an order passed by the Tribunal.
2. Challenge to the order dated 13th October, 2017 passed by the Maharashtra Sales Tax Tribunal at Mumbai regarding a stay application filed in two VAT second appeals.
3. Examination of the Tribunal's order directing the petitioner to deposit specific amounts in installments.

Issue 1: Interpretation of Section 27 of the Maharashtra Value Added Tax Act, 2002

The judgment delves into the interpretation of Section 27 of the Maharashtra Value Added Tax Act, 2002, which provides for the appeal to the High Court from every order passed by the Tribunal involving a substantial question of law. The Court refers to precedents in other statutes to establish that appeals against procedural or interlocutory orders that do not affect rights or liabilities may not be maintainable. The Court emphasizes that an appeal lies only if the order affects the merits of the action by determining some right or liability, and procedural orders can be challenged in the appeal against the final order. Thus, the Court concludes that unless the Tribunal's order affects the rights and liabilities of the parties, no appeal will lie against an interim or procedural order.

Issue 2: Challenge to the Tribunal's Order on Stay Application

The petitioner challenged the order passed by the Maharashtra Sales Tax Tribunal at Mumbai on a stay application in two VAT second appeals. The Tribunal had allowed the stay application subject to the deposit of specific amounts in installments. The petitioner contended that the order was harsh and impossible to comply with, highlighting that various contentions were not addressed by the Tribunal. The Court noted the amounts directed to be deposited, which were 50% of the principal tax amounts payable, and found that the Tribunal had addressed the issue of a prima facie case. The Court observed that substantial relief had been granted to the petitioner, and the impugned order was discretionary and equitable in nature.

Issue 3: Examination of Installment Payment Terms

The Court examined the installment payment terms set by the Tribunal and modified the order to convert the fortnightly installments into monthly installments as requested by the petitioner. The Court directed the petitioner to pay the first installment by a specified date and subsequent installments monthly. The Court disposed of the petition by modifying the impugned order to a limited extent, specifying the payment schedule for each appeal, and emphasizing that a single default would vacate the stay granted by the Tribunal. The judgment concluded by disposing of the writ petition based on the revised installment payment terms.

This detailed analysis of the judgment from the Bombay High Court covers the interpretation of the law, challenges to the Tribunal's order, and modifications made by the Court regarding installment payments, ensuring a comprehensive understanding of the legal issues involved.

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