Court Upholds Interim Stay on Tax Collection, Grants Equitable Relief

The court upheld the validity of the interim order granting conditional stay against tax collection pending appeal disposal under the KGST Act for the years 2003-2004 and 2004-2005. While the petitioner argued for a reduction in the tax amount due by producing statutory forms, the court granted equitable relief by altering the payment conditions. The 2nd respondent was directed to promptly consider and dispose of the appeals after affording a personal hearing to the petitioner within one month. Recovery steps for the assessed amounts were restrained if the petitioner remitted 25% of the amount under demand within two weeks.

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Issues involved: Challenge against interim order u/s KGST Act for assessments of 2003-2004 and 2004-2005, conditions of stay, non-production of statutory forms, hardship due to payment conditions, equitable relief.

Interim Order Challenge: The challenge was against Ext.P10 interim order issued by the 2nd respondent on appeals pending under the KGST Act for the years 2003-2004 and 2004-2005. The order granted conditional stay against tax collection pending appeal disposal, requiring the petitioner to remit 60% of the total amounts due and furnish a security bond for the balance.

Validity of Interim Order: The court noted that interference with the interim order was not justified unless there was a total non-application of mind. The appellate authority had considered the contentions raised and observed the petitioner's failure to produce required statutory declaration forms to substantiate their claims for concessional tax rates. The court held that the conditional stay order did not warrant interference.

Petitioner's Contentions: The petitioner argued that all statutory forms were available and their production could lead to a reduction in the tax amount due. They highlighted the company's profitable status as a central government undertaking and the pending writ petition questioning conditions for granting interim stay. The petitioner sought relief from the 60% payment condition, claiming that if concessional rates were allowed, no liability would exist.

Equitable Relief Granted: The court, while stating that interference on merits was not warranted, decided to grant an equitable relief by altering the conditions stipulated in Ext.P10. The 2nd respondent was directed to consider and dispose of the appeals promptly after affording a personal hearing to the petitioner within one month. Additionally, the respondents were restrained from taking recovery steps for the assessed amounts for 2003-2004 and 2004-2005 if the petitioner remitted 25% of the amount under demand within two weeks.

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