2022 (4) TMI 1154 - HC - VAT and Sales Tax

Validity of assessment order - maintainability of appeal - requirement of pre-deposit - HELD THAT - Both the appellate authority as well as the revisional authority were not justified in out-rightly rejecting the prayer for stay of the petitioner. Power to entertain prayer for stay is incidental and ancillary to the power to hear appeal and revision. It is a discretionary power, which is required to be exercised in a fair and judicious manner balancing the interest of both the sides. Since petitioner has already deposited 12 % of the disputed tax for the purpose of admission of the appeal, it is concluded that if the petitioner deposits a further amount of 12 % of the disputed tax, respondents shall not take coercive steps for recovery of the entire outstanding dues in terms of the order of assessment. It is directed that if the petitioner deposits further 12 % of the disputed tax within a period of 30 days from today, the demand in terms of the assessment order dated 26.03.2021 shall remain stayed till disposal of the appeal pending before respondent No.2 - petition disposed off.

Summary

Issues:
1. Rejection of prayer for stay by the revisional authority during the pendency of appeal before the appellate authority.

Analysis:
The petitioner, a registered dealer under the Telangana Value Added Tax Act, 2005, was aggrieved by an assessment order levying a higher rate of tax on goods supplied. The petitioner filed an appeal and a stay petition before the appellate authority, depositing 12½% of the disputed tax as required for admission of the appeal. However, the stay petition was rejected by the appellate authority, and upon revision, the revisional authority also rejected the petitioner's stay prayer.

The High Court analyzed the relevant provisions of the TVAT Act concerning appeals and stay orders. It was noted that for admission of an appeal, the appellant must deposit 12½% of the disputed tax. Additionally, the appellate authority has the discretion to order stay of the balance tax amount under dispute pending appeal, upon furnishing security or payment of a specified part of the disputed tax.

The Court held that the power to entertain a prayer for stay is incidental to the power to hear appeals and revisions, and must be exercised judiciously. Considering that the petitioner had already deposited 12½% of the disputed tax for admission of the appeal, the Court directed the petitioner to deposit a further 12½% of the disputed tax within 30 days. Upon such deposit, coercive recovery steps for the outstanding dues were stayed until the appeal's disposal.

Ultimately, the Court disposed of the writ petition with no order as to costs, and directed the closure of any pending miscellaneous applications in the matter. The judgment emphasized the importance of balancing the interests of both parties and the discretionary nature of granting stays in tax matters.