2021 (6) TMI 584 - HC - VAT and Sales Tax

Rejection to grant of stay pending appeal before the Tribunal - pre-deposit for maintaining the appeal - Section 33 of the APVAT Act, 2005 - invocation of Article 226 of the Constitution of India - HELD THAT - Since the petitioner herein has already deposited 50% of the disputed tax amount i.e., 12.5% before the first appellate authority and 37.5% before the Tribunal and also deposited another 50% while filing the appeals before the first appellate and second appellate authorities questioning the penalty imposed and since the contentions raised by the petitioner herein in the grounds of appeal are required to be gone into by the Tribunal under Section 33 of the APVAT Act, this Court does not find any justification on the part of the 1st respondent in declining to consider the request of the petitioner herein by going into merits of the appeal. Petition allowed.

Summary

Issues:
1) Validity of the order declining to grant stay pending appeal under Section 33 of APVAT Act, 2005
2) Whether the order warrants interference under Article 226 of the Constitution of India

Issue 1:
The petitioner challenged an order dismissing their stay application under Section 33(6)(a) of the APVAT Act, 2005. The petitioner had initially appealed an assessment order by depositing 12.5% of the disputed tax. Subsequently, they deposited an additional 37.5% and filed an appeal before the Tribunal. The petitioner, pending the appeal before the Tribunal, requested a stay on the collection of 50% of the disputed tax, which was declined by the 1st respondent. The petitioner argued that the respondent erred in rejecting the stay application and should not have touched upon the merits of the appeal. The Government Pleader contended that the order was justified and did not require interference under Article 226.

Issue 2:
The Court found that the petitioner had complied with deposit requirements at each stage of appeal and had raised substantial issues in their appeal before the Tribunal. The petitioner had already deposited 50% of the disputed tax and raised multiple contentions that needed to be examined by the Tribunal under Section 33 of the APVAT Act. The Court held that the 1st respondent was not justified in declining the petitioner's request for stay and interfering with the appeal's merits. Consequently, the Court allowed the writ petition, setting aside the 1st respondent's order and granting the stay application until the Tribunal's decision. No costs were awarded, and any pending miscellaneous petitions were closed as a result of the judgment.