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TMI Blog2020 (3) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... ial modification thereof. This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to either decrease or even increase the percentage of the disputed tax demand to be deposited for an assessee to enjoy stay pending appeal. The circular provides the guidelines to enable the Assessing Officers and Commissioners to exercise such discretionary powers more uniformly - Ordinarily, the writ Court would be slow in interfering with such discretionary exercise of powers by the authority concerned. However, in the present case, the total tax demand is quite on higher side. The issues are at the first appeal stage. Even 15% of the disputed tax dues comes to around ₹ 60 Lakh. It is deemed fit to reduce the requirement of depositing the disputed tax dues to enable the writ applicant to avail the benefit of the stay pending the appeal before the Appellate Authority to 5% - application disposed off. - R/SPECIAL CIVIL APPLICATION NO. 4610 of 2020 R/SPECIAL CIVIL APPLICATION NO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling of Polyurethane Footwear (for short PU Footwear ). It is the case of the writ applicant that Polyurethane is a plastic. The writ applicant has been registered under the Gujarat Value Added Tax Act, 2003 ( for short the VAT Act ). It holds a registration certificate under the Central Sales Tax Act, 1956. 5.2 According to the writ applicant, it discharged its tax liability under the VAT Act at the rate of 4% plus 1% additional tax by classifying PU Footwear sold by it as plastic footwear under Entry 59 of Schedule II to the VAT Act, which reads as under; Sr. No. Description of Goods Rate of tax 59 Plastic Footwear Four paise in the rupee 5.3 The writ applicant was assessed by the Assistant Commissioner of Commercial Tax under Section 34(2) of the VAT Act up to the year 2013-14. The assessment was conducted after complete scrutiny of the records. The classification of footwear sold by the writ applicant was also accepted. No dues were outstanding in accordance with the assessment order. 5.4 It appears that the officials of the Comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7348 5.7 The writ applicant preferred first appeals challenging such assessment/reassessment orders. The First Appellate Authority insisted for pre-deposit for admission of the first appeal and stay against the recovery of the dues. As the writ applicant was not able to make the pre-deposit, all the first appeals came to be summarily dismissed. 5.8 The writ applicant, thereafter, preferred second appeals before the Tribunal and challenged the orders passed in the first appeals. Before the Tribunal, the principal argument of the writ applicant was that the footwear is predominantly made of plastic and it has been correctly classified, so far, as plastic footwear . 5.9 It appears that the principal argument canvassed by the writ applicant did not find favour with the Tribunal. The Tribunal, in its impugned order. while directing the writ applicant to make a pre-deposit at the rate of 15% of tax, observed as under; 27. Considering the rival submissions, facts and circumstances of the case, the First Appeals have been summarily dismissed for non-payment towards predeposit amount by the First Appellate Authority, therefore, this Tribunal cannot dw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n other words, due to financial crunch, his client is unable to comply with the order passed by the Tribunal of making a pre-deposit of 15% of the demanded tax. According to Mr. Sheth, this will cause a serious prejudice to his client. Even otherwise, the business has been affected because of the current market conditions. Mr. Sheth would urge that in such circumstances, his client may not be asked to make a pre-deposit for the purpose of hearing the appeals on merits. 7. On the other hand, Mr. Chintan Dave, the learned AGP appearing for the respondent has vehemently opposed this writ application. 8. According to Mr. Dave, no error, not to speak of any error of law, could be said to have been committed by the Tribunal in passing the impugned order. 9. Mr. Dave would submit that no interference is warranted in the facts of the present case. According to Mr. Dave, the order of pre-deposit is discretionary in nature and it cannot be said that the discretion has been exercised arbitrarily. In such circumstances, according to Mr. Dave, no interference is called for and the writ application deserves to be rejected. 10. Having heard the learned counsel appearing for the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d demand is such that payment of a lump sum amount lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr. CIT/CIT, who after considering all relevant facts shall decide the quantum/proportion of demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. (C) In a case where stay of demand is granted by the assessing officer on payment of 15% of the disputed demand and the assessee is still aggrieved, he may approach the jurisdictional administrative Pr. CIT/CIT for a review of the decision of the assessing officer. (D) The assessing officer shall dispose of a stay petition within 2 weeks of filing of the petition. If a reference has been made to Pr. CIT/CIT under para 4 (B) above or a review petition has been filed by the assessee under para 4 above, the same shall also be disposed of by the Pr. CIT/CIT within 2 weeks of the assessing officer making such reference or the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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