2020 (12) TMI 133 - HC - VAT and Sales Tax

Grant of stay for full amount of tax - stay of demand was granted upto the extent of 90% of the tax - Enhancement of turnover - astronomical demand based on presumption without any material on record and arbitrary in nature - HELD THAT - It is well settled that while deciding the waiver application, the authority concerned has to record a finding as to whether a prima facie case is made out or not and whether the deposit would entail undue financial hardship - It is also well settled that the phrase 'prima facie case' would include even an arguable case, I am unable to understand as to why and what circumstances did the Tribunal direct the deposit of 10% of the amount after having recorded that a prima facie case was made out and the deposit would cause financial hardship to the revisionist. In view of the fact that the revision is confined to the challenge of the order passed by the Tribunal, this Court in exercise of its revisional power cannot direct any refund of the amount, which according to the counsel for the revisionist, are illegally debited from the account of the revisionist. The revisionist, if so advised, may take appropriate proceedings for refund of the said amount. The question is decided in favour of the assessee and against the Department - Revision allowed.

Summary

Issues involved:
1. Whether the Tribunal and the Authority failed to consider the strong prima facie case in favor of the Revisionist?
2. Whether the Tribunal and Authorities were justified in not granting complete stay to the revisionist during the pendency of the first appeal?

Detailed Analysis:
Issue 1:
The High Court heard the revision related to the Assessment Year 2014-15, where the Assessing Authority enhanced the turnover, resulting in a disputed tax liability. The appellate authority allowed the challenge against the assessment order, remanding the matter back to the Assessing Authority. Subsequently, the Assessing Authority passed a fresh order further increasing the turnover and disputed tax amount. The revisionist appealed to the First Appellate Authority against the exaggerated tax demand and sought a stay during the appeal process. The First Appellate Authority granted a partial stay of demand, which was further appealed by the revisionist to the Commercial Tax Tribunal. The Tribunal, in its order, granted a stay of demand up to 90% of the tax, requiring the revisionist to deposit 10% of the tax amount. The High Court found the Tribunal's decision arbitrary, as it acknowledged a prima facie case and financial hardship but still directed the deposit of 10% of the tax. The Court held the order to be illegal and contrary to established legal precedents, ultimately deciding in favor of the revisionist against the Department.

Issue 2:
Regarding the recovery of the amount by attaching the account of the revisionist without reasonable time post the filing of the revision, the Court noted the action as contrary to previous mandates and circulars. However, since the revision was limited to challenging the Tribunal's order, the Court, in its revisional power, could not direct a refund of the amount. The revisionist was advised to pursue appropriate proceedings for the refund separately. The Court allowed the revision on the questions of law framed, deciding in favor of the assessee and against the Department. Additionally, the First Appellate Court was directed to expedite the hearing of the appeal on merits and make a decision in accordance with the law.

In conclusion, the High Court's judgment addressed the issues of consideration of prima facie case, granting of stay during appeal, and recovery actions by the authorities, ultimately ruling in favor of the revisionist and directing further proceedings in the case.