Appellate stay protection continues despite statutory time limit, where delay in appeal disposal is not the assessee's fault.

The interim stay granted in a pending Karnataka Value Added Tax appeal was held to continue until the appeal is decided, because the power to grant stay is incidental to appellate jurisdiction and should not lapse merely due to the statutory time limit where delay is not attributable to the assessee. The court also recognised the practical hardship caused by the provision and indicated that legislative amendment would be appropriate. The Tribunal was requested to dispose of the appeal expeditiously, preferably within six months, while the assessee's interim protection remained in force.

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Issues: Whether the interim stay granted by the Appellate Tribunal under the Karnataka Value Added Tax Act, 2003 should continue till disposal of the pending appeal notwithstanding the limitation contained in Section 63(7)(b), and whether directions should be issued for early disposal of the appeal.

Analysis: The petition arose from the assessee's pending appeal before the Karnataka Appellate Tribunal on the rate of tax applicable to its products. The Tribunal had already granted stay, but the statutory scheme in Section 63(7)(b) was noted to limit the life of the stay. The Court observed that the power to grant stay is incidental to appellate jurisdiction and that a stay should not lapse merely because the appeal could not be heard within the stipulated period for reasons beyond the control of the assessee or the Tribunal. The Court also noted the practical difficulty caused by the existing provision and indicated that suitable legislative amendment was required.

Conclusion: The interim order granted by the Tribunal on 30/03/2016 was directed to continue until disposal of the appeal, and the Tribunal was requested to decide the appeal expeditiously, preferably within six months.

Final Conclusion: The petition was disposed of with protection of the assessee's interim relief and a direction for speedy adjudication of the pending appeal.

Ratio Decidendi: The power to grant interim stay is incidental to appellate jurisdiction, and where delay in disposal of the appeal is not attributable to the assessee, the stay should not be allowed to lapse solely because of a statutory time limit.

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