2024 (11) TMI 395 - HC - VAT / Sales Tax

Interpretation of statute - Section 18 (A) (5) of the CST Act - pre-deposit for admission of appeal and stay of recovery - HELD THAT - It is found that the Appellate Authority was examining the case on an application under Section 18 (A) (5) of the CST Act, as is apparent from the first para of the order and proceeded to frame a question of law for the purpose of admission. But while passing the order, it has made a stay of recovery, subject to condition of depositing 10% of the tax due. The language may be a little misleading, but the very purpose is of depositing 10% of the tax due, as a pre-condition for admission in stay, which is in consonance with Section 18 (A) (5) of the CST Act. Thus, it is clear that the admission of appeal would be subject to pre-deposit of 10% of the tax, which has been directed by the VAT Appellate Tribunal. The order, therefore, does not warrant any interference. The writ petitions are dismissed.

Summary

Issues:
Interpretation of Section 18 (A) (5) of the CST Act regarding pre-deposit for admission of appeal and stay of recovery.

Detailed Analysis:

1. The judgment by the High Court addressed multiple appeals with identical issues. The main issue revolved around the interim order passed by the VAT Appellate Tribunal, which was challenged before the Court. The Tribunal had considered whether the appellant was liable to pay CST in inter-state transactions without mandatory F forms, and had imposed a condition of pre-deposit for stay of recovery.

2. The Tribunal's order raised a question of law regarding the appellant's status as a dealer under the CST Act and the liability to pay CST in certain transactions. The Tribunal allowed a stay of recovery subject to the appellant depositing 10% of the tax due. The High Court noted that the purpose of the pre-deposit under Section 18 (A) (5) of the CST Act was for admission of appeal, and upheld the Tribunal's decision.

3. The appellant argued that the pre-deposit under Section 18 (A) (5) was solely for admission of appeal and should not be a condition for staying recovery. However, the High Court examined the language and purpose of the provision, emphasizing that the pre-deposit was a prerequisite for admission of appeal, as per the CST Act.

4. The Court highlighted the relevant provision of Section 18 (A) (5) of the CST Act, which allows the highest appellate authority to pass an order of stay subject to terms and conditions, including pre-deposit. The explanation provided clarified the scope of the section, indicating that the pre-deposit was essential for admission of the appeal.

5. Ultimately, the High Court concluded that the Tribunal's order, requiring a pre-deposit of 10% of the tax due for admission of appeal, was in line with Section 18 (A) (5) of the CST Act. As a result, the writ petitions were dismissed, and any pending miscellaneous applications were also disposed of accordingly.

This detailed analysis of the judgment from the High Court provides a comprehensive overview of the issues involved, the Tribunal's decision, the arguments presented, and the Court's final ruling based on the interpretation of the relevant legal provisions.