2021 (11) TMI 164 - HC - VAT and Sales Tax

Grant of stay of recovery of amount - requirement of payment of pre-deposit amount of 30% of the modified demand and also on furnishing simple bond for the balance amount within one month - HELD THAT - The Tribunal has rightly exercised the discretion not only by granting the stay but has put the petitioner on reasonable condition. In the case on hand we would have certainly declined to exercise our jurisdiction under Article 227 of the Constitution for any purpose but for the fact that the petitioner claims to have suffered a few set backs due to on going situation arising from Covid-19 and financial difficulties are being faced by petitioner. The petitioner commits default of one instalment, the stay granted by Ext.P4 and modified by this order would stand vacated - Petition disposed off.

Summary

Issues:
1. Appellant challenging order of Deputy Commissioner (Appeals) regarding tax appeals.
2. Appellant questioning condition of depositing 30% of modified demand for stay of recovery.
3. Argument for deletion of 30% condition or imposition of a more reasonable condition.
4. Opposition to prayer by Senior Government Pleader.
5. Court's analysis of the situation and decision to modify the condition for stay of recovery.

Analysis:
The appellant filed Tax Appeals against the order of the Deputy Commissioner (Appeals) regarding tax matters. The Appellate Tribunal granted a stay of recovery subject to the condition that the appellant deposits 30% of the modified demand and furnishes a simple bond for the remaining amount. The appellant challenged this condition through an Original Petition under Article 227 of the Constitution of India.

Advocate for the appellant argued that while the Tribunal was right in granting the stay, the imposition of the 30% condition was unjust considering the circumstances of the appellant. It was suggested that a more reasonable condition should be imposed to prove the appellant's bona fides. On the other hand, the Senior Government Pleader opposed this argument, stating that the circumstances presented by the appellant were not relevant for the 30% deposit condition and that such conditions are crucial for tax recovery in pending cases.

After considering the submissions of both parties, the Court found that the Tribunal had appropriately exercised its discretion in granting the stay but decided to modify the condition due to the appellant's claim of facing setbacks and financial difficulties, exacerbated by the ongoing Covid-19 situation. The Court modified the condition, stating that the recovery proceedings would be stayed until the disposal of the appeals, with the appellant required to deposit 30% of the modified demand in three equal instalments, with the first instalment due by a specified date. It was further clarified that failure to pay an instalment would result in the vacation of the stay granted by the Court.

In conclusion, the Court disposed of the Original Petition by modifying the condition for the stay of recovery, taking into account the appellant's circumstances and ensuring a more feasible payment schedule.