2014 (9) TMI 249 - HC - VAT and Sales Tax

Partial grant of stay order - Exparte orders - Held that - It is clear that the assessment order was passed exparte. Prima-facie, the observations made by the Assessing Officer, that several opportunities were afforded to the applicant, appears to be incorrect, inasmuch as on the first page of the assessment order, it is mentioned that first and last date of hearing is mentioned as 28.1.2014 and 30.1.2014. The assessment order was passed on 31.1.2014. Thus, it is evident on record that the observations made by the Assessing Officer, that several opportunities were afforded to the applicant, is apparently incorrect. The Tribunal has also noted the fact with regard to the submission of list of purchases against the invoices, list of Form-C, Form-D and Form-H. However, the Tribunal was of the view that its verification/examination is required by the authorities below. Entire disputed amount of tax involved in First Appeal No.225 of 2014 (Central ) (Assessment Year 2011-12-U.P.) and First Appeal No.200 of 2014 (Assessment Year 2011-12- U.P. Entry tax) pending before the Additional Commissioner Grade-II, (Appeal) Commercial Tax, Noida are stayed till the disposal of the first appeal by the first appellate authority subject to the condition that the applicant furnishes security in the form of other than cash or bank guarantee to the satisfaction of the Assessing Officer within 30 days - Decided in favour of assessee.

Issues:
1. Grant of stay of demand to the applicant by the Tribunal.
2. Ex parte assessment orders passed against the applicant for Assessment Year 2011-12.
3. Disputed amount of tax and benefits claimed by the applicant.
4. Observations made by the Assessing Officer regarding opportunities provided to the applicant.
5. Tribunal's decision and reasoning in partially allowing the appeals.
6. Consideration of evidence and submissions by the Tribunal.
7. Setting aside the impugned order of the Tribunal and granting stay on the disputed tax amount.
8. Directions to the First Appellate Authority for expeditious hearing and decision.

Analysis:

1. The applicant filed three revisions against the Tribunal's order granting stay of demand to the extent of 75% and 80% for different Assessment Years. The applicant was aggrieved by the grant of stay and claimed that no demand should be made against them if benefits of tax against Form-C, Form-H, and Form-D were granted.

2. Ex parte assessment orders were passed against the applicant for the Assessment Year 2011-12, creating a significant demand. The First Appellate Authority granted a 50% stay on the disputed tax amount, which was further appealed by the applicant to the Tribunal.

3. The applicant claimed that there should be no demand against them after considering the benefits of tax created in Form-C, Form-H, and Form-D. The Tribunal partially allowed the appeals and granted stay on the disputed tax amount to the extent of 75% and 80% for different Assessment Years.

4. The Assessing Officer claimed to have provided several opportunities to the applicant, which was contested by the applicant's counsel as arbitrary and baseless. The Tribunal noted the submission of lists of purchases, Form-C, Form-D, and Form-H, but stated that further verification was required.

5. The Tribunal partially allowed the appeals after considering the evidence and submissions. The Tribunal's decision was based on the need for verification of the submitted lists and the incorrect observations made by the Assessing Officer regarding opportunities provided to the applicant.

6. The Tribunal should have looked into the lists submitted by the applicant and considered the ex parte nature of the assessment order. The Tribunal's decision was criticized for not addressing the timing of notices served to the applicant and for not thoroughly examining the matter.

7. The High Court set aside the Tribunal's order and granted a stay on the disputed tax amount pending the disposal of the first appeals by the First Appellate Authority. The applicant was directed to furnish security within 30 days to the satisfaction of the Assessing Officer.

8. The High Court directed the First Appellate Authority to expedite the hearing and decision of the appeals within two months. It clarified that an attachment order issued earlier would not be enforced if the applicant complied with the conditions for the grant of stay as indicated in the order.

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