2019 (5) TMI 898 - HC - GST

Judicial propriety - STO coercive action after stay granted by FAA - restraining transfer of vehicles to RTO authorities - attachment of land - Entry Tax Act - HELD THAT - the first appellate authority has granted stay against the coercive recovery of remaining dues in respect of all three years, the second respondent State Tax Officer could not have continued with the attachment of the agricultural land of the petitioner and the instructions issued to the RTO authorities to restrain transfer of any vehicle of the petitioner. The impugned communication dated 11.3.2019 of the second respondent is clearly in contravention of the stay order passed by the first appellate authority in favour of the petitioner; and is in flagrant disregard of the same, and, therefore, cannot be sustained. It is quite perturbing to note that despite the first appellate authority having stayed further recovery, not only did the second respondent not act on his own and revoke the instructions issued to the RTO authorities and lift the attachment over the land, even after the petitioner drew his attention to the order and made a request to revoke the instructions and attachment, the second respondent in flagrant disobedience of the order passed by the first appellate authority insisted upon continuing with the same, which displays lack of respect for the order passed by the first appellate authority. For the foregoing reasons, the petition succeeds and is accordingly allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to letter restraining transfer of vehicles and land attachment under Entry Tax Act.

Analysis:
The petitioner challenged a letter issued by the State Tax Officer continuing instructions to restrain transfer of vehicles and attachment of land under the Entry Tax Act. The petitioner, engaged in executing service contracts using excavators, believed the excavators were not specified goods under the Act. Assessment proceedings were initiated culminating in orders imposing entry tax and penalties for purchasing excavators. During the pendency of appeals against these orders, coercive recovery proceedings were initiated, leading to instructions to RTO authorities not to allow vehicle transfers and attachment of agricultural land.

The petitioner made pre-deposits based on which the first appellate authority granted stay against coercive recovery. Despite the stay order, the State Tax Officer did not revoke the instructions to RTO authorities or the land attachment. The petitioner requested revocation of recovery proceedings, but the State Tax Officer, citing pending appeals, continued the instructions and attachment. The petitioner challenged this decision, arguing that the State Tax Officer was not justified in continuing the restrictions despite the stay order.

The High Court found that the State Tax Officer's actions were in contravention of the stay order granted by the first appellate authority. Despite the stay against coercive recovery, the State Tax Officer persisted with the restrictions, showing a lack of respect for the appellate authority's order. The Court quashed the impugned communication, revoked the instructions to RTO authorities, and lifted the attachment on the agricultural land. The petition was allowed, and costs were awarded to the petitioner.