2014 (2) TMI 858 - HC - VAT and Sales Tax

Waiver of pre deposit - whether requirement of 20 per cent of disputed tax by Assessee having not been stayed by the authorities below, have they committed any patent error of law and can it be said that impugned orders have been passed without any application of mind or proper application of mind - Held that - occasion to pass provisional assessment order has been derived by Deputy Commissioner from the factum that in the checking conducted by Mobile Squad on 22.8.2013, vehicle no. HR 38Q 1200 was found loaded with 46.360 metric ton of H.R. Coils. The driver of vehicle possessed consignment notes, and, besides other documents, Form-38 having Column 6 completely blank. It did not mention bill number and date in both the copies possessed by Driver. Keeping Form-38 blank in the above column may help Assessee in reuse of Form to evade tax and, therefore, in addition to violation of Section 50 of Act, 2008, it is also in contravention to the Commissioner s Circular No. 0910015 dated 3.6.2009. The Mobile Squad Officer issued a show cause notice and ultimately required Assessee to furnish security of ₹ 8 lacs and odd on the estimated value of goods and thereafter the same was released. All these aspects have been taken note by the Assessing Authority and the existence of these facts is not disputed. The requirement of prima facie case, to be shown by appellant, is one but initial factor which would justify exercise of power of stay by Assessing Authority, but then to what extent stay order should be granted, it shall depend on multiple factors and reasons, which may vary from case to case - discrepancy in respect to one of the important document is admitted. Though the Assessee has attempted to explain it, but it has not been believed by the authority at the initial level. Now its credibility has to be examined by Appellate Authority. At the stage of granting stay order, it cannot be presumed that credibility must be believed by Appellate Authority, without anything more. In all the authorities cited at the bar in support of questions raised in these revisions to seek favour for Assessee, it has been held that Appellate Authority should apply its mind to the question whether stay order should be granted and if so, to what extent. The power should not be exercised mechanically or on conjectures and surmises or in an arbitrary manner. Simultaneously, it also cannot be said that mere existence of a prima facie case, bereft of all other relevant factors, would justify grant of stay order to the extent of 100 per cent. After all, Appellate Authority has to adopt a balancing approach in favour of both the parties and cannot proceed to go out and out to support appellant s case though correctness of the order passed by authority below is yet to be examined by it - revisionist, however, has failed to satisfy this Court also that Assessee must have been granted 100 per cent stay - Decided against assessee.

Issues Involved:
1. Prima facie case for complete dispensation of deposit.
2. Jurisdiction of assessing authority under Section 25(1) of the Uttar Pradesh Value Added Tax Act, 2008.
3. Basis for provisional assessment order under Section 25(1).
4. Material available on record for provisional assessment.
5. Tribunal's consideration of specific grounds raised by the applicant.

Detailed Analysis:

Issue 1: Prima Facie Case for Complete Dispensation of Deposit
The applicant argued that based on the decision in ITC Limited Vs. Commissioner (Appeals) 2005 ELT 347, if a strong prima facie case is established, complete dispensation of deposit should be allowed. The court, however, found that this principle does not apply to the present case as it cannot be said that two views are not possible or that there is a strong prima facie case in favor of the Assessee-Revisionist to the extent that Revenue has no case at all. Thus, the court answered this question against the Assessee.

Issue 2: Jurisdiction of Assessing Authority under Section 25(1)
The applicant contended that none of the clauses of Section 25(1) of the Act, 2008 applied, and therefore the assessing authority had no jurisdiction to make a provisional assessment order. The court found that the Assessing Authority had a genuine and sustainable ground to believe there was an evasion of tax due to the discrepancy in Form-38, which justified the provisional assessment. Thus, the court held that a prima facie case was made out by Revenue for making a provisional assessment under Section 25(1)(iii), and the Tribunal's direction to deposit 20% of the disputed amount was justified.

Issue 3: Basis for Provisional Assessment Order under Section 25(1)
The applicant argued that the provisional assessment order should be based on material available on record with the assessing authority. The court noted that the Assessing Authority had considered the importance and relevance of Form-38, Column-6, and the potential for tax evasion due to the blank column. The court upheld that the provisional assessment was validly made based on the material available, thus answering this question against the Assessee.

Issue 4: Material Available on Record for Provisional Assessment
The applicant claimed that there was no material available on record to justify the provisional assessment order. The court observed that the Assessing Authority had detailed reasons and material, including the discrepancy in Form-38, to justify the provisional assessment. Therefore, the court found that the provisional assessment was justified and answered this question against the Assessee.

Issue 5: Tribunal's Consideration of Specific Grounds Raised by the Applicant
The applicant argued that the Tribunal erred by not considering the specific grounds raised regarding the applicability of Section 25(1) for provisional assessment. The court found that the Tribunal had granted substantial indulgence by staying 80% of the disputed amount and requiring only 20% deposit. The court held that the Tribunal's order was not without application of mind or proper consideration of the law, thus answering this question against the Assessee.

Conclusion:
The court dismissed all the revisions, finding no merit in the arguments presented by the Assessee. The Tribunal's order to stay 80% of the disputed amount and require a 20% deposit was upheld, and the provisional assessment under Section 25(1) was deemed justified based on the material available on record. The court emphasized the necessity of a balanced approach by the Appellate Authority in such matters, considering both the interest of the appellant and the Revenue.

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