2019 (10) TMI 22 - HC - VAT and Sales Tax

Stay against realization of the disputed tax - compounding fee - grant of conditional stay - Extension of time limit for compliance of condition of stay - HELD THAT - The scope of interference with an interim order passed by the Tribunal is limited only on the aspects as to whether the Tribunal had failed to apply its mind in appreciating the prima facie merits in the appeal, and as to whether the Tribunal had failed in affording opportunity of hearing before passing the interim order. The impugned order in this case reflects proper consideration of the prima facie merit and the same was passed after hearing the appellant. Further, the condition insisted is only for payment of 20% of the disputed tax. Hence, we are not inclined to interfere with. The learned counsel for the petitioner sought indulgence for extending the time stipulated for complying with the condition and also for allowing installment facility for payment of the 20% amount, by pleading the financial stringency experienced. Petition disposed off.

Summary

Issues:
Challenge against interim order passed by Kerala Value Added Tax Appellate Tribunal.

Analysis:
The petitioner challenged an interim order (Ext.P9) passed by the Kerala Value Added Tax Appellate Tribunal, seeking a stay against the realization of disputed tax. The Tribunal granted a conditional stay, requiring the petitioner to deposit 20% of the total demand and execute a simple bond for the balance amount within thirty days from the order. The petitioner approached the High Court, arguing that the condition stipulated was improper.

The High Court clarified that its interference with the Tribunal's interim order is limited to whether the Tribunal failed to consider the prima facie merits of the appeal and whether it provided an opportunity for a hearing before passing the order. The Court found that the Tribunal had properly considered the prima facie merits and had heard the appellant before passing the order. Additionally, the condition imposed was reasonable, as it only required payment of 20% of the disputed tax.

The petitioner requested an extension of time and installment facility for paying the 20% amount due to financial constraints. The Court, while declining to interfere with the Tribunal's order, decided to take a lenient view. The Court allowed the petitioner to remit the 20% amount in two equal monthly installments, due by October 15, 2019, and November 15, 2019, considering it as proper compliance with the condition stipulated in Ext.P9.

In conclusion, the High Court disposed of the Original Petition (Tax) accordingly, maintaining the Tribunal's interim order but providing flexibility to the petitioner in meeting the payment condition.