2013 (4) TMI 298 - HC - VAT and Sales Tax

Application for interim relief - Stay granted to the extent of 70% of the tax amount - Held that - As decided in I.T.C. Ltd. vs. Commissioner (Appeals), Custom & Central Excise, Meerut-I 2003 (10) TMI 70 - HIGH COURT OF JUDICATURE AT ALLAHABAD while considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must apply its mind as to whether the appellant has a strong prima facie case on merit. Keeping in view the settled position of law on the point in issue and from the perusal of the appellate order passed by the appellate tribunal thereby passing the impugned orders, the said authorities have not indicated its mind so far as the existence of the prima facie case on merits on appeal as well as the financial condition which are to be considered by them while passing the impugned orders on an application for stay pending in the first appeal. The said mandatory condition is to be taken into consideration while disposing of an application for interim relief moved by the assessee by the appellate authority as well as tribunal during the pendency of appeal - the present revision is disposed of with a direction to the FAA to decide the appeal filed by the assessee expeditiously say within a period of two months from the date of receiving a certified copy of this order.

Summary

Issues:
1. Assessment order for the year 2007-08 passed against the revisionist.
2. Appeal filed under Section 9 of the U.P. Trade Tax Act along with an application for interim relief.
3. Grant of interim orders by the first appellate authority and Trade Tax Tribunal.
4. Revision filed before the High Court challenging the interim relief orders.
5. Compliance with legal principles regarding granting of interim relief.

Analysis:

1. The High Court noted that the assessing authority had passed an assessment order against the revisionist for the assessment year 2007-08.

2. The revisionist filed an appeal under Section 9 of the U.P. Trade Tax Act along with an application for interim relief. The first appellate authority granted an interim order waiving 70% of the tax assessed, which was further modified by the Trade Tax Tribunal to grant 80% interim relief.

3. The revisionist, aggrieved by the interim relief orders, filed a revision before the High Court. The Court emphasized the importance of maintaining a balance between the rights of the individual and the State in matters of recovery of sovereign dues.

4. Referring to a previous judgment, the Court highlighted that the appellate authority must consider the existence of a strong prima facie case on merit and the financial condition of the appellant while deciding on interim relief applications. The Court observed that the authorities had not adequately considered these aspects in the impugned orders.

5. Therefore, the High Court disposed of the revision with a direction to the first appellate authority to decide the appeal expeditiously within two months. During this period, the revisionist was not required to deposit the tax amount assessed by the assessing authority. The Court emphasized the need for the appellate authority to consider the prima facie case on merit and the financial condition of the appellant while deciding on interim relief applications, in line with established legal principles.