2018 (5) TMI 1330 - HC - GST

Conditional order of stay - claim of petitioner is that the reason for condition imposed is not stated by 2nd respondent - Held that - In Ext.P4 order, the 2nd respondent does not state reasons as to why the petitioner was required to deposit the amounts as a condition for the grant of stay - This Court has held in Archana Agencies v Commercial Tax Officer 2014 (5) TMI 1024 - KERALA HIGH COURT that an authority considering a stay petition is bound to give reasons even while granting conditional stay - the 2nd respondent is directed to pass fresh orders on the stay application preferred by the petitioner, after hearing the petitioner - petition disposed off.

Summary

Issues:
Challenge to conditional order of stay due to lack of valid exercise of discretion by the 2nd respondent.

Analysis:
The petitioner challenged the conditional order of stay issued by the 2nd respondent, arguing that the discretion was not validly exercised. The petitioner had filed an appeal along with a stay petition against an assessment order. The 2nd respondent's Ext.P4 order required the petitioner to pay 20% of the tax and interest as a condition for the grant of stay against the remaining amounts confirmed in the assessment order. The petitioner contended that the 2nd respondent did not provide reasons for imposing this condition, which is essential as per the ruling in Archana Agencies v Commercial Tax Officer - 2014 (2) KLT 715. The High Court noted that the lack of reasons in the Ext.P4 order was a valid ground for challenge.

The High Court, after hearing both parties, disposed of the writ petition with specific directions. Firstly, the court highlighted that the 2nd respondent failed to state reasons for requiring the petitioner to deposit the amounts as a condition for the stay, emphasizing the importance of providing reasons even for conditional stays. Citing the Archana Agencies case, the court emphasized the necessity of giving reasons in such situations. Consequently, the court quashed the Ext.P4 order and instructed the 2nd respondent to issue fresh orders on the stay application after hearing the petitioner. The petitioner was directed to appear before the 2nd respondent, who was instructed to issue fresh orders within a month. Additionally, any recovery steps initiated against the petitioner were to be put on hold until the fresh orders were passed and communicated.

In conclusion, the High Court's judgment focused on the requirement for the 2nd respondent to provide reasons for imposing conditions on the stay petition. By emphasizing the need for valid exercise of discretion and the provision of reasons, the court ensured procedural fairness and directed the 2nd respondent to reevaluate the stay application with proper justification.