2018 (6) TMI 304 - HC - VAT and Sales Tax

High Court overturns Tribunal decision due to lack of evaluation and consistency, orders fresh decision within six weeks.

M/s Otis Elevators Company India Ltd. Versus Commissioner of Commercial Taxes, U.P Lucknow

The High Court allowed the revision in favor of the revisionist, quashing the Tribunal's order for lack of proper evaluation and consistency. The Court ... Levy of sales tax - Inter-state transaction - Whether the Tribunal below ought to have considered the strong prima facie case in favour of the Revisionist in view of the inter-State nature of the transaction, Section 3 of the Central Sales Tax Act and the Specific bar contained in Section 7 of the U.P. VAT Act, the Constitution Bench Decision of the Supreme Court in Kone Elevator India Pvt. Ltd. v. State of Tamil Nadu and Ors. [2014 (5) TMI 265 - SUPREME COURT], because of which no tax can be imposed on the transaction of the U.P. authorities? Held that:- In the case at hand the Court finds that while passing the impugned order the Tribunal has failed to consider various parameters as required. Furthermore the Court finds that it has taken note of the assertion by the revisionist herein before the Tribunal that the similar issue has been decided by that very Tribunal in its favour vide judgment dated 31.3.2008 for the assessment year 2002-03, however, merely on account of pendency of a revision against it before this Court at the behest of the State the said aspect has been ignored and a contrary view has been taken giving protection only to the extent of 85% of the due amount. This in the view of this Court is not correct approach, consistency in such matters especially when the Bench in respect of the same assessee granted the relief in respect of an earlier assessment year on merits should have been maintained, if not, cogent reasons should have been given which do not exist in this case - revision allowed. Issues:1. Whether the Tribunal should have considered the prima facie case in favor of the Revisionist due to the inter-State nature of the transaction and relevant legal provisions.2. Whether the Tribunal was justified in not granting complete relief to the Revisionist based on previous decisions.Analysis:1. The High Court considered the revisionist's appeal against the Commercial Tax Tribunal's order granting interim relief. The revisionist contended that the Tribunal failed to consider the parameters required for interim relief, as established by previous Supreme Court and High Court decisions. The revisionist argued that the Tribunal's decision to increase the interim relief from 60% to 85% was cryptic and mechanical, lacking consideration of prima facie case, balance of convenience, and irreparable loss.2. Another argument raised by the revisionist was the inconsistency in decisions taken by the assessing and appellate authorities based on a judgment of the Supreme Court. The revisionist claimed that despite a subsequent decision overruling an earlier judgment, the authorities continued to rely on the outdated ruling, leading to unjust outcomes. The High Court noted that the Tribunal failed to consider the parameters set in previous judgments and ignored the revisionist's past favorable decision for a similar issue, which resulted in granting protection for only 85% of the due amount.3. The High Court, after detailed consideration, found the Tribunal's order lacking proper evaluation of the parameters and consistency in decision-making. The Court emphasized the importance of following established legal principles and giving cogent reasons for any deviation. Consequently, the High Court quashed the impugned order and directed the Second Appeal to be restored before the Tribunal for a fresh decision within six weeks. The Court also ordered a stay on recovery pending the fresh decision, ensuring independent consideration by the Tribunal in light of the Court's observations. Ultimately, the revision was allowed in favor of the revisionist, providing a comprehensive resolution to the issues raised.