2020 (8) TMI 377 - HC - VAT and Sales Tax

Recall of order - ex-parte order - section 32 of the U.P. Value Added Tax Act, 2008 - contention of applicant is that as per section 29(6) of the Act, no proceedings could have continued after the end of the assessment year - HELD THAT - When the First Appeal was being heard and the applicant's case was that no proceeding against him could be continued as per section 29(6) of the Act, then a complete stay of the recovery ought to have been there. Under such circumstances, it is being provided that while the First Appeal would be heard and decided within a period of four months from the date of presentation of this order, the disputed demand as was being made by the Department shall remain stayed for a period of four months or till the disposal of the First Appeal, whichever is earlier. Revision disposed off.

Summary

Issues:
1. Whether the proceedings against the applicant were beyond the period of limitation as per section 29(6) of the U.P. Value Added Tax Act, 2008.
2. Whether a complete stay on the recovery should have been granted to the applicant during the appeal process.

Analysis:
Issue 1:
The applicant, engaged in the sales and purchase of paper, faced a demand of &8377; 48,52,686 after being assessed by authorities on 5.3.2018. Claiming the proceedings were ex-parte, the applicant filed for the recalling of the order under section 32 of the Act. The Assessing Authority recalled the order on 30.9.2018. The counsel argued that as per section 29(6) of the Act, proceedings had to conclude before the end of the assessment year in which the order was passed, and the drawn proceedings exceeded the limitation period. The applicant then filed a First Appeal challenging the partial stay granted by the First Appellate Court, leading to a Second Appeal where 90% of the disputed amount was stayed. Dissatisfied with the partial stay, the applicant filed a Revision, contending that no proceedings could continue after the assessment year.

Issue 2:
During the Revision, the applicant's counsel argued for a complete stay on recovery, citing relevant case laws. The Standing Counsel, however, believed that a 90% stay was sufficient to protect the applicant's interest. The judge, after hearing both sides, opined that if the applicant's case was that no proceedings could continue as per section 29(6) of the Act, a complete stay on recovery should have been granted during the First Appeal. Consequently, the judge ordered that the disputed demand would remain stayed for four months or until the disposal of the First Appeal, whichever is earlier, emphasizing the need for a complete stay during the appeal process to ensure fairness and justice.

In conclusion, the High Court's judgment addressed the issues of limitation under the U.P. Value Added Tax Act, 2008, and the necessity of a complete stay on recovery during the appeal process to protect the applicant's rights. The decision highlighted the importance of adhering to statutory limitations and ensuring procedural fairness in tax matters.