2016 (6) TMI 221 - HC - VAT and Sales Tax

Deposit of 50 per cent of demand during pendency of appeal - Petitioner has no balance amount towards credit in his bank account - Learned Tribunal has wrongly held that the petitioner has sufficient funds in his bank account and he shall deposit 50 per cent of the demand - Held that - as the consistent view taken by this Court from time to time, I am of the view that the petitioner shall deposit 20 per cent of the demand raised during pendency of the first appeal and the First Appellate Court shall decide the appeal expeditiously. - Trade tax revisions disposed of

Summary

Issues:
1. Dispute over depositing 50% of tax demand during appeal process.
2. Interpretation of sufficiency of funds in bank account for deposit.
3. Application of legal principles for granting interim relief/stay of recovery.
4. Comparison with previous judgments for determining deposit percentage.
5. Direction for expeditious appeal decision by First Appellate Authority.

Analysis:
1. The judgment deals with two Trade Tax Revisions challenging the order requiring the petitioner to deposit 50% of the tax demand during the pendency of the appeal. The petitioner contested the order, arguing that the bank account balance shown was related to overdraft and not available funds. The Tribunal upheld the deposit requirement based on the bank account balance assessment.

2. The petitioner's counsel highlighted the discrepancy in the bank account balance interpretation, emphasizing that the funds were not available for deposit as they represented overdraft amounts owed to the bank. The opposing counsel supported the Tribunal's decision, stating that the order was justified based on the available reasons provided.

3. The judgment referenced legal principles from previous cases to determine the appropriate percentage for deposit during the appeal process. It emphasized the need for a balance between individual rights and state interests in matters of recovery of dues. The court stressed the importance of considering undue hardship on the appellant and the necessity of a strong prima facie case for granting relief.

4. Drawing from past judgments, the court decided that the petitioner should deposit 20% of the demand raised during the appeal, aligning with the principles of balancing interests and ensuring a fair process. The court cited instances where full stay was granted when clear evidence existed to challenge the tax demand, emphasizing the need for a thorough examination of the case merits.

5. The judgment concluded by directing the First Appellate Authority to promptly decide on the appeals within two months and allowing the petitioner to deposit 20% of the demand during this period. This decision aimed to ensure a timely resolution of the dispute while providing a reasonable deposit requirement for the petitioner.