2019 (7) TMI 650 - HC - VAT and Sales Tax

Attachment of bank account - application for condonation of delay - stay of demand - validity of penalty order and order of assessment - Section 25(1) of the KVAT Act - case of petitioner is that either the mere filing of appeal or mere pendency of appeal does not amount to granting stay by the assessing authority - HELD THAT - A case is made out for issuing necessary directions to second respondent to dispose of the delay condonation petitions and stay petitions in Ext.P3 series. The respondents have issued Ext.P4 bank attachment notice. The petitioner apprehends recovery or realisation of the subject matter of penalty pending before the appellate authority. The petitioner volunteers to pay 20% of the penalty amount demanded, i.e., ₹ 15,55,770/- and permit the petitioner to operate the bank account. The appellate authority/second respondent considers and disposes of Ext.P3 series applications as early as possible, preferably within two months from the date of receipt of copy of this judgment - The respondents are directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from today.

Summary

Issues:
Delay in disposal of delay condonation and stay petitions, Apprehension of recovery of penalty amount, Bank attachment notice issued, Prayer for direction to dispose of applications, Prayer for stay on coercive steps for recovery, Prayer for permission to transfer 20% of penalty amount.

Analysis:
The petitioner filed appeals against penalty and assessment orders under the KVAT Act with delay condonation and stay petitions. The delay in disposing of these petitions could result in the assessing officer taking steps to recover the tax amount under challenge, rendering the appeal ineffective. The petitioner seeks directions for expeditious disposal of the delay and stay petitions to protect their interests pending appeal.

Upon perusing the relevant documents, the court is satisfied that it is necessary to direct the second respondent to dispose of the delay condonation and stay petitions promptly. The petitioner is concerned about the issuance of a bank attachment notice, which could lead to the recovery of the penalty amount pending before the appellate authority. The petitioner offers to pay 20% of the penalty amount demanded to operate the bank account and requests permission to do so.

In light of the limited prayer and grounds presented, the court orders the following: (a) The second respondent must consider and dispose of the delay and stay petitions within two months. (b) The respondents are prohibited from taking coercive steps or recovering the disputed amounts for ten weeks. (c) The petitioner is directed to transfer 20% of the penalty amount to the respondents promptly. (d) Upon successful transfer, there will be a stay on the bank attachment notice during the specified ten-week period, allowing the petitioner to transfer the amount without hindrance.