2019 (3) TMI 1414 - HC - VAT and Sales Tax

Supervisory jurisdiction - compliance with the interim order passed by the Kerala Value Added Tax Appellate Tribunal - compounded rate of tax - Held that - In the case at hand, we find that the petitioner has not remitted any amount during the pendency of the appeal. However, considering the entire circumstances as mentioned above, we are inclined to make a reduction with respect to the condition imposed by the Tribunal, as a gesture of equity by making it clear that the case cannot be considered as a precedent in any matter. While dismissing the above original petition, we modify Ext.P12 order passed by the Appellate Tribunal by reducing the condition for deposit of the amount, from 30% to 20% of the total amount due. The deposit as directed by us shall be made within one month from today.

Summary

Issues:
Challenge to interim order passed by the Kerala Value Added Tax Appellate Tribunal under Article 227 of the Constitution of India.

Analysis:
The petitioner, a Works Contractor, challenged the reopening of assessment under the Kerala Value Added Tax Act, 2003 for the assessment year 2014-2015. The assessment was contested before the Deputy Commissioner, Appeals, and subsequently before the Tribunal in Second Appeal. An interim petition was filed seeking stay of recovery. The Tribunal granted stay subject to the condition of depositing 30% of the total amount and executing a bond for the balance within 30 days. The High Court, invoking supervisory jurisdiction, noted that interference with an interim order passed by the Tribunal, based on discretionary powers, was not warranted. The Tribunal's condition was based on prima facie merit of the appeal, and the High Court found no error, irregularity, or impropriety in the order. The High Court declined to entertain the original petition, upholding the Tribunal's decision.

The petitioner sought indulgence due to a payment delay of approximately 31 lakhs and inability to comply with the interim order. Reference was made to a proviso in Section 55 of the KVAT Act, providing automatic stay on remittance of 20% of the disputed amount for first appeals. Despite no remittance during the appeal, the High Court, considering the circumstances, decided to reduce the deposit condition imposed by the Tribunal as an act of equity. The High Court clarified that this modification was specific to the case and not to be considered a precedent in any matter.

In conclusion, the High Court dismissed the original petition but modified the Tribunal's order by reducing the deposit condition from 30% to 20% of the total amount due, with the directive for the deposit to be made within one month from the judgment date.