Outright Rejection Of Stay Application Is Not Justified, Need To Exercise The Appellate And Revisional Jurisdiction Judicially:Telangana High Court
The Telangana High Court has held that the appellate and revisional authorities must judiciously exercise their discretionary power to grant a stay under the Telangana VAT Act.A division bench of Justice Ujjal Bhuyan and Justice Surepalli Nanda, while staying the demand in terms of the assessment order, directed the petitioner to deposit twelve and a half percent of the disputed tax...
The Telangana High Court has held that the appellate and revisional authorities must judiciously exercise their discretionary power to grant a stay under the Telangana VAT Act.
A division bench of Justice Ujjal Bhuyan and Justice Surepalli Nanda, while staying the demand in terms of the assessment order, directed the petitioner to deposit twelve and a half percent of the disputed tax within a period of 30 days.
The petitioner/assessee was a registered dealer under the Telangana Value Added Tax Act, 2005. For the assessment period from 2016-17 to 2017-18, the department passed an assessment order levying a higher rate of tax on the goods supplied by the petitioner. Instead of 5%, it was held that the goods were liable to be taxed at a rate of 14.5%.
Aggrieved by the assessment order, the petitioner preferred appeal along with a stay petition before the Appellate Joint Commissioner for admission of the appeal. The petitioner deposited the prerequisite of twelve and a half percent of the disputed tax. The appeal was pending. However, the Appellate Joint Commissioner rejected the stay petition filed by the petitioner.
Section 31(1) of the TVAT Act deals with appeals to appellate authorities. Sub-Section (1) enables filing of an appeal by an aggrieved dealer. As per the second proviso, an appeal shall not be admitted by the appellate authority unless the dealer produces proof of payment of tax, penalty, interest or any other amount admitted to be due to the extent of 12 1/2% of the disputed tax, penalty, interest or any other amount for the relevant tax period in respect of which the appeal has been preferred.
As per Section 31(1)(a)(3), the appellate authority may, on an application filed by the appellant and subject to furnishing of such security, or on payment of such part of the disputed tax within such time as may be specified, order a stay of collection of the balance tax amount under dispute, pending disposal of the appeal. Clause (b) provides for the filing of a revision petition to the revisional authority against an order passed by the appellate authority, refusing to stay the order.
The court held that both the appellate authority and the revisional authority were not justified in outright rejecting the prayer for stay of the petitioner. The power to entertain prayer for stay is incidental and ancillary to the power to hear appeal and revision. It is a discretionary power that is required to be exercised in a fair and judicious manner, balancing the interests of both parties.
"Since the petitioner has already deposited 12 1/2% of the disputed tax for the purpose of admission of the appeal, we are of the view that if the petitioner deposits a further amount of 12 1/2% of the disputed tax, respondents shall not take coercive steps for recovery of the entire outstanding dues in terms of the order of assessment," the court said.
Case Title: Access Tough Doors P. Ltd. Vs Additional Commissioner ST
Case No: Writ Petition No. 16285 of 2022
Citation: 2022 LiveLaw (Tel) 30
Dated: 30/03/2022
Counsel For Petitioner: Advocate Shaik Jeelani Basha
Counsel For Respondent: GP For Commercial Tax