2015 (3) TMI 83 - HC - VAT and Sales Tax

Waiver of security bond or bank guarantee - Conditions imposed by the appellate authority in respect of stay granted in favour of the petitioner firm - Held that - Petitioner firm has already paid 25% of the amount in question at the time of preferring the appeal and in some of the cases the petitioner firm has paid the amount between 50% and 90% of the impugned demand notices issued by the respondents. petitioner firm has paid the amount towards his liability, this court, considering the amount sofar paid in each of the Writ Petitions, modifies the conditions imposed by the appellate authority only insofar as to the grant of Bank Guarantee or Security Bond. The petitioner firm will pay amount as stated in order and shall execute a personal bond for the balance tax amount and for the entire penalty amount. - It is made clear that if the petitioner firm fails to adhere any one of the conditions imposed by this Court through this order, this modification granted by this Court shall stand cancelled without any reference to this Court and the order of the appellate authority will get automatically restored. - Decided conditionally in favour of assessee.

Summary

Issues:
Conditions imposed by the appellate authority in respect of stay granted in favor of the petitioner firm.

Analysis:
The petitioner firm challenged the conditions imposed by the appellate authority regarding the payment of the disputed tax amount. The firm had already paid 25% of the tax at the time of appeal and a varying percentage of the amount demanded in different cases. The appellate authority required the firm to provide a Security Bond or Bank Guarantee for the balance amount, which the firm was unable to do. The firm argued that the demanded amount was disputed and should be decided by the relevant authority. The Additional Government Pleader contended that safeguarding the revenue was crucial, supporting the appellate authority's decision.

The court considered previous judgments where personal bonds were accepted as a condition for continuing the stay on tax payment. Referring to these precedents, the court modified the conditions imposed by the appellate authority. The court directed the petitioner firm to pay specific amounts for certain cases within a specified period, instead of providing a Bank Guarantee or Security Bond. Additionally, the firm was required to execute a personal bond for the remaining tax and penalty amounts within a set timeframe. The court warned that failure to comply with these conditions would result in the cancellation of the modification granted by the court, reverting to the appellate authority's original order.

In conclusion, the court allowed the Writ Petitions to the extent indicated in the judgment, without imposing any costs. The judgment provided a clear directive on the payment requirements and bond execution for the petitioner firm, ensuring compliance with the modified conditions to maintain the stay on tax payment.