2023 (1) TMI 636 - HC - VAT and Sales Tax

Validity of revisional order - time limitation - seeking stay of revisional order during pendency of appeal - HELD THAT - Having regard to the fact that petitioner has already deposited 25% of the disputed tax and considering the fact that the larger issue is pending consideration before this Court, we are of the view that insisting on further payment by the petitioner during the pendency of the appeal would not be just and proper. The order dated 05.11.2022 is set aside. Further demand on the basis of the revisional order dated 23.03.2020 shall remain stayed and would be subject to outcome of the appeal - Petition disposed off.

Summary

Issues:
Challenge to legality and validity of the order dated 05.11.2022 passed by respondent No.1 under Article 226 of the Constitution of India.

Analysis:
The petitioner, a private limited company and a registered dealer under the Telangana Value Added Tax Act, challenged the order passed by respondent No.1. The dispute arose from an assessment period where an excess tax payment was initially held by respondent No.3. However, respondent No.2 issued a show cause notice proposing to revise the order, alleging tax on various items including insurance claim, old tyres, oil, scrap items, and transportation charges. Despite the petitioner's objections and without a personal hearing, respondent No.2 revised the order, leading to a significant tax demand.

The petitioner appealed before the Telangana Value Added Tax Appellate Tribunal, complying with the pre-condition of paying 25% of the disputed tax. The main contention before the Tribunal was the revisional order being beyond the limitation period, rendering it a nullity. Additionally, a stay petition was filed before respondent No.1, seeking to stay the revisional order during the appeal process. Respondent No.1 directed the petitioner to pay 50% of the disputed tax, challenging which led to the present proceeding.

In the judgment, the Court examined the impugned orders and contentions, granting a stay on the collection of 50% of the disputed tax, with a direction for the petitioner to pay the amount within a specified period. The Court acknowledged the petitioner's compliance with the initial deposit requirement and the pending larger issue before the Court. Consequently, the Court set aside the order dated 05.11.2022, staying the further demand based on the revisional order until the appeal's outcome. The writ petition was disposed of, with pending miscellaneous applications closed, and no costs were awarded.

This detailed analysis covers the legal issues, procedural steps, arguments presented, and the final judgment's rationale, ensuring a comprehensive understanding of the case and its implications.