2018 (4) TMI 1488 - HC - VAT and Sales Tax

Interpretation of statute - Section 18A of the CST Act, 1956 - recovery of tax pending the appeal - Held that - in the light of the exposition of law, the issue is answered in favor of the petitioners - Once this concession is given and even otherwise we do not find any point surviving in this petition after this judgment - petition allowed.

Summary

Issues:
1. Challenge to the order demanding part payment by Maharashtra Sales Tax Tribunal for entertaining an appeal.
2. Interpretation of Section 18A of the CST Act, 1956.
3. Rectification application against the order imposing a deposit condition.
4. Reliance on previous judgments for legal interpretation.

Analysis:
1. The petitioners sought relief through a writ petition under Article 226 of the Constitution of India to set aside the order demanding a part payment of ?75,00,000 by the Maharashtra Sales Tax Tribunal for entertaining an appeal. The petitioners, engaged in trading medical equipment, claimed the goods imported were stocked and transferred to depots outside Maharashtra and sold to customers within those states, treated as intrastate sales. The tax demand under the CST Act for the assessment period 2012-13 was challenged, leading to the appeal to the Tribunal.

2. The appeal relied on Section 18A of the CST Act, 1956, seeking a stay on tax recovery pending appeal. However, the Tribunal allowed the stay application with a condition to deposit ?75,00,000. A Rectification Application was filed against this order, which was rejected, leading to the present petition. During arguments, legal interpretations of Section 18A were discussed, referencing judgments by the Hon'ble Supreme Court and the High Court in similar cases.

3. The Tribunal's decision to impose a deposit condition was challenged through the Rectification Application, which was rejected. However, during the proceedings, the learned AGP for the respondents conceded that the issue was in favor of the petitioners based on previous judgments. Consequently, the High Court allowed the writ petition, quashing the impugned order and directing the Tribunal to decide the appeal without insisting on any part payment by the petitioner.

4. The reliance on previous judgments for legal interpretation played a crucial role in the High Court's decision to allow the writ petition. The Court emphasized that the contentions of the parties were kept open, and the order was interim and tentative, not binding the Tribunal in the final determination of the issue raised in the appeal. The judgment provided relief to the petitioners by setting aside the order demanding part payment and ensuring a fair appeal process without financial constraints.