2014 (8) TMI 893 - HC - VAT and Sales Tax

Waiver of pre-deposit - Interpretation of Section 18A(5) of the Central Sales Tax Act, 1956 - Tribunal has directed the petitioner to deposit 1/3rd of the disputed tax and to produce proof of deposit - Held that - Section 18A(5) of the Act empowers the Tribunal to pass an order of Stay subject to such terms and conditions as it thinks fit, and such order may, inter alia, indicate the portion of tax as assessed, to be deposited prior to admission of the appeal. A bare reading of the said provision makes, it makes clear that the word used such order means an order of stay in which the tribunal may put such terms and conditions as it thinks fit and may indicate the portion of tax as assessed to be deposited prior to admission of the appeal. Therefore, in my view, no pre-deposit is required to be made under Section 18A(5) of the Act for consideration of stay application. - order set aside - matter remanded back for reconsideration.

Summary

Issues: Interpretation of Section 18A(5) of the Central Sales Tax Act, 1956 regarding pre-deposit for stay application.

The judgment by the High Court of Allahabad involved a writ petition challenging an order passed by the Commercial Tax Tribunal. The Tribunal had directed the petitioner to deposit 1/3rd of the disputed tax amount under Section 18A(5) of the Central Sales Tax Act, 1956 for considering the stay application. The petitioner argued that Section 18A(5) does not mandate a pre-deposit for entertaining a stay application. The Standing Counsel contended that the Tribunal had the authority to direct such a deposit. The Court analyzed the provision of Section 18A(5) which allows the highest appellate authority to pass an order of stay with terms and conditions, including indicating the portion of tax to be deposited before admission of the appeal. The Court clarified that no pre-deposit is required for a stay application under Section 18A(5) and that the Tribunal can specify the tax amount to be deposited in the stay order. The Court emphasized that the Tribunal can grant stay in full or part, or reject the application, based on the circumstances of the case. Consequently, the writ petition was allowed, setting aside the Tribunal's order and directing the Tribunal to decide the stay application within a week without coercive action for ten days from the judgment date. The Court clarified that it did not assess the case's merits or grant any interim relief based on prima facie case or balance of convenience.