High Court Upholds VAT Tribunal's Order on Tax Deposit and Bond Requirements

The High Court upheld the Kerala Value Added Tax Appellate Tribunal's interim order requiring the petitioner to deposit 20% of the disputed tax demand and execute a bond for the balance within thirty days. The Court found the Tribunal had considered the merits and provided a hearing before issuing the order. While declining to alter the Tribunal's decision, the Court allowed the petitioner to pay the 20% amount in two equal installments by specified dates, showing leniency towards the financial constraints faced by the petitioner.

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Issues:
Challenge against interim order passed by Kerala Value Added Tax Appellate Tribunal.

Analysis:
The petitioner challenged an interim order (Ext.P9) passed by the Kerala Value Added Tax Appellate Tribunal, seeking a stay against the realization of disputed tax. The Tribunal granted a conditional stay, requiring the petitioner to deposit 20% of the total demand and execute a simple bond for the balance amount within thirty days from the order. The petitioner approached the High Court, arguing that the condition stipulated was improper.

The High Court clarified that its interference with the Tribunal's interim order is limited to whether the Tribunal failed to consider the prima facie merits of the appeal and whether it provided an opportunity for a hearing before passing the order. The Court found that the Tribunal had properly considered the prima facie merits and had heard the appellant before passing the order. Additionally, the condition imposed was reasonable, as it only required payment of 20% of the disputed tax.

The petitioner requested an extension of time and installment facility for paying the 20% amount due to financial constraints. The Court, while declining to interfere with the Tribunal's order, decided to take a lenient view. The Court allowed the petitioner to remit the 20% amount in two equal monthly installments, due by October 15, 2019, and November 15, 2019, considering it as proper compliance with the condition stipulated in Ext.P9.

In conclusion, the High Court disposed of the Original Petition (Tax) accordingly, maintaining the Tribunal's interim order but providing flexibility to the petitioner in meeting the payment condition.

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