2021 (8) TMI 45 - HC - VAT and Sales Tax

Validity of assessment order - application for interim stay of the disputed tax - appeal filed under Section 57 of the U.P. Value Added Tax Act 2008 - HELD THAT - In the facts and circumstances of the case once a prima facie case is made out the appellate authority must enter into the merits of the case without calling upon the assessee to discharge the entire liability of disputed tax. The revision is allowed with a direction to the first appellate authority to decide the pending appeal expeditiously and preferably within a period of two months from the date of production of a certified copy of this order.

Summary

Issues:
Validity of assessment order for the year 2017-18, challenge to first appellate authority's order, application for interim stay of disputed tax, appeal before Tribunal, exemption percentage granted by various authorities, revision seeking 100% relief, statutory right to appeal, tax liability on food grains/pulses, reliance on precedent judgments.

Validity of Assessment Order:
The judgment concerns the challenge to the assessment order for the year 2017-18 passed by the assessing authority. An application for interim stay of the disputed tax was filed along with the appeal before the first appellate authority. The first appellate authority disposed of the application by allowing exemption to deposit 50% of the disputed tax. Subsequently, the matter was taken to the Tribunal through an appeal under Section 57 of the U.P. Value Added Tax Act, 2008. The Tribunal, through an order, granted exemption to the extent of 90% of the disputed tax. The revisionist sought complete relief by filing a revision challenging the exemption percentage granted by the Tribunal.

Statutory Right to Appeal and Tax Liability:
The revisionist argued that being a government undertaking, it should not be burdened with the tax liability within the scope of the law. The counsel contended that the right to appeal is a statutory right that should not be curtailed based on deposit conditions, which could be harsh. Additionally, it was argued that the imposition of tax liability on food grains/pulses was impermissible under the law, especially with the enforcement of the Goods and Sales Tax Act from 1.7.2017, which reversed the tax liability on closing stock.

Exemption Percentage and Precedent Judgments:
The revisionist's counsel relied on a judgment to support the claim for 100% exemption in cases of strong prima facie evidence. The counsel also presented similar orders from the Court as annexures to the revision. The respondent's counsel acknowledged that a prima facie case was established since the appellate authorities had already granted a 90% stay on the disputed tax deposit. The respondent's counsel agreed that once a prima facie case is established, the appellate authority should delve into the case's merits without requiring the assessee to discharge the entire disputed tax liability.

Judgment and Relief Granted:
The Court allowed the revision, directing the first appellate authority to promptly decide the pending appeal, preferably within two months from the order's date. The Court ordered that the demand for the disputed tax would remain stayed in its entirety until the first appeal's decision, subject to the outcome. This judgment emphasized the importance of a prima facie case and the statutory right to appeal while considering tax liabilities and exemptions in government undertakings.