2023 (4) TMI 316 - HC - VAT and Sales Tax

Rejection of petitioner s applications for grant of stay order under Section 31 (3) (a) of AP VAT Act - rejection on the ground that there is no prima facie case made out to grant stay on collection of the tax demands - HELD THAT - Once the appeal has been admitted application for stay ought not to have been rejected on the ground it has been so rejected. Rejection of the stay application by observing that on the grounds of appeal prima facie case for stay is not made out in an admitted appeal does not appeal. In MOOL CHAND YADAV AND ANR. VERSUS RAZA BULAND SUGAR COMPANY 1982 (10) TMI 209 - SUPREME COURT the Hon ble Apex Court held that the judicial approach requires that during the pendency of the appeal the operation of an order having serious civil consequences must be suspended. More so when appeal is admitted. The Act provides for grant of stay in admitted appeal subject to the conditions as under Section 31 (3) (a) of the Act and consequently the 1st respondent while considering the stay application in an admitted appeal ought to have decided the same by such judicial approach. The 1st respondent shall make endeavour to decide the appeals expeditiously and within the statutory period - the disputed tax under the orders under challenge in the appeals before the 1st respondent shall not be collected from the petitioner subject to the condition that the petitioner deposits 25% of the disputed amount in every appeal within a period of six weeks from the date of receipt of a copy of this order. Writ petition is disposed off.

Summary

Issues:
1. Rejection of stay application under Section 31 (3) (a) of the A.P. Value Added Tax Act.
2. Consideration of alternative remedy of revision under Section 31 (3) (b) of the Act.
3. Judicial approach towards granting stay in an admitted appeal.
4. Adjustment of statutory deposit for admission of appeal.

Analysis:
1. The petitioner appealed against assessment orders for the years 2014-15 to 2017-18, seeking stay on tax demands. The appellate authority rejected the stay applications, citing lack of prima facie case for granting stay. The petitioner argued reliance on interim orders from writ petitions where a 25% deposit condition was imposed by the court.

2. The learned GP for Commercial Taxes contended that the petitioner could seek revision under Section 31 (3) (b) of the Act instead of a writ petition. However, the court noted several pending writ petitions where interim stays were granted, indicating a reluctance to compel the petitioner to pursue the alternative remedy of revision.

3. The court emphasized that once an appeal is admitted under Section 31, the consideration of stay application becomes relevant. It highlighted the requirement under Section 31 (3) (a) to grant stay subject to specified conditions, stating that rejecting a stay application in an admitted appeal without proper justification is not acceptable.

4. The petitioner requested an adjustment of the statutory 12.5% deposit for admission of the appeal, proposing to deposit only 12.5% more of the disputed amount. However, the court declined this request, stating that the statutory 12.5% deposit is separate from the 25% deposit condition imposed by the court in the interim orders.

5. Ultimately, the court disposed of the writ petition by directing the 1st respondent to expedite the appeal process and not collect the disputed tax from the petitioner if a 25% deposit is made within six weeks. The court rejected the petitioner's plea to adjust the statutory deposit and clarified that the interest liability remains unaffected. No costs were awarded, and pending miscellaneous petitions were closed.