2015 (10) TMI 1050 - HC - VAT and Sales Tax

Recovery proceedings - pending extension of stay applications - Held that - Extension of stay petitions filed by the petitioner were not heard. In the meantime, on 08.09.2015, the 3rd respondent herein issued a notice directing the petitioner to produce stay orders for the years 2008-09 and 2009-10, in the absence of which, recovery action will be initiated. Since the revenue of the department is very much safeguarded by remitting 50% of the disputed tax for all the assessment years as well as furnishing bank guarantee for the remaining 50% of the disputed tax and penalty wherever applicable, which are still in force till February 2016, this Court is of the view that the appeals are to be disposed of within a stipulated time and the recovery proceedings shall be kept in abeyance till the disposal of the appeals. In view of the above, the 2nd respondent/appellate authority is directed to take up the appeals and dispose of the same on merits and in accordance with law, within a period of eight weeks from the date of receipt of a copy of this order and till such time no recovery proceedings need be initiated as against the petitioner. It is made clear that the stay of original assessment orders shall be in force till the disposal of the appeals

Summary

Issues:
Petition for mandamus to stop recovery steps pending appeal disposal.

Analysis:
The petitioner filed writ petitions seeking a writ of mandamus to prevent the 1st respondent from taking recovery actions based on certain proceedings until the appeals are decided. The petitioner had challenged assessment orders for various years and had filed appeals with stay applications, complying with the conditions set by the appellate authority. Despite readiness to complete the appeals, they remained pending. The petitioner sought extensions for stay orders, which were granted but were due for expiry. The appeals were transferred to another authority but were not disposed of. The 3rd respondent issued a notice for stay orders, prompting the petitioner to approach the 2nd respondent for a decision on the pending extensions. The 2nd respondent held hearings but did not pass orders, leading to the threat of recovery actions. Consequently, the petitioner approached the court for relief.

The court noted that the petitioner had paid the required percentages of disputed taxes, furnished bank guarantees, and complied with the conditions set by the appellate authority. Despite this, the extension of stay petitions was not heard, and the 3rd respondent issued a notice for stay orders. The court emphasized that the revenue department's interests were protected by the petitioner's actions. It directed the 2nd respondent to dispose of the appeals within eight weeks, maintaining the stay on original assessment orders until appeal resolution. Recovery proceedings were to be halted until the appeal disposal. No costs were imposed, and connected petitions were closed.