2020 (8) TMI 607 - HC - VAT and Sales Tax

Levy of entertainment Tax - petitioner got itself registered under the said Act on the rolls of the 1st respondent w.e.f. 01.08.2008 - demand of tax for the tax period 2011-12, 2012-13 and 2013-14 on three entities - HELD THAT - The impugned Stay rejection order dt.30.05.2020 passed by the 3rd respondent deserves to be set aside on the ground of nonconsideration of contentions of petitioner by the 3rd respondent, and that the matter ought to be remitted to 3rd respondent for fresh consideration. The impugned passed by the 3rd respondent for the Assessment period 2010-11 to 2013-14 is set aside - the Stay application filed by the petitioner in the Appeal filed by it before the 3rd respondent is restored to the file of the 3rd respondent - Petition allowed.

Summary

Issues:
Challenge to stay rejection order in Appeal No.A/36/19-20 - Entertainment Tax for the Assessment period 2010-11 to 2013-14.

Analysis:
The petitioner, a Public Limited Company providing Digital Cable Services, challenged the stay rejection order passed by the 3rd respondent in Appeal No.A/36/19-20 regarding Entertainment Tax. The petitioner was registered under the Andhra Pradesh Entertainment Tax Act, 1939 and was paying tax at 5% per connection. The 1st respondent issued a show-cause notice proposing a tax levy for the years 2011-12 to 2013-14, which was contested by the petitioner. Subsequently, a Revision Show-cause notice was issued by the 2nd respondent, leading to a Revision Order imposing a substantial tax liability. The petitioner's objections led to the setting aside of the first Revision assessment order, but a fresh Revision Order was passed, prompting the petitioner to file a Writ Petition challenging it.

The petitioner's subsequent appeal before the 3rd respondent, seeking a stay of the disputed tax pending appeal, was dismissed on 30.05.2020. The petitioner contended that the 3rd respondent did not consider their arguments adequately and merely rejected the stay application without proper evaluation. Citing a previous court order deprecating the practice of rejecting stay applications without reasons, the petitioner argued that the 3rd respondent's decision lacked justification. The Court, in light of previous judgments, found merit in the petitioner's argument and set aside the stay rejection order, directing the 3rd respondent to reconsider the matter after duly considering the petitioner's contentions.

Therefore, the Writ Petition was allowed, the impugned order was set aside, and the stay application was restored for fresh consideration by the 3rd respondent. The Court emphasized the need for a reasoned order taking into account the petitioner's arguments in the stay application and grounds of appeal. No costs were awarded, and pending miscellaneous petitions were to be closed as a result of this judgment.