Interim stay in second tax appeal may be granted under writ jurisdiction to prevent the appeal from becoming nugatory.

Section 33(6) of the Andhra Pradesh VAT Act was confined to stay applications in appeals against orders or proceedings of the Deputy Commissioner under Sections 21 or 32, so it did not extend to an appeal from the first appellate authority under Section 31; the authority therefore lacked jurisdiction to entertain the stay request. At the same time, the Act did not expressly bar interim protection in a second appeal where no prior stay was operating, and writ jurisdiction under Article 226 could be used to preserve the subject matter when the appellant showed a strong arguable case. On that basis, stay of collection of the disputed balance was held justified pending disposal of the appeal.

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Issues: (i) whether the authority under Section 33(6) of the Andhra Pradesh Value Added Tax Act, 2005 had jurisdiction to entertain a stay application when the appeal was against an order of the first appellate authority under Section 31 of the Act; (ii) whether collection of the remainder of the disputed tax could be stayed pending the second appeal in exercise of writ jurisdiction.

Issue (i): whether the authority under Section 33(6) of the Andhra Pradesh Value Added Tax Act, 2005 had jurisdiction to entertain a stay application when the appeal was against an order of the first appellate authority under Section 31 of the Act.

Analysis: Section 33(6) confers power to stay collection only in cases where the appeal is preferred against an order or proceeding of the Deputy Commissioner under Section 21 or Section 32. The appeal in question arose from an order of the first appellate authority under Section 31, and the statutory language did not extend the power to such a case.

Conclusion: The authority had no jurisdiction to entertain the stay application.

Issue (ii): whether collection of the remainder of the disputed tax could be stayed pending the second appeal in exercise of writ jurisdiction.

Analysis: The scheme of Section 31(3)(a), (b) and (c) shows that the Act expressly deals with stay in certain situations, but it does not contain an express embargo against grant of stay where no prior stay was operating and the appellant makes out a strong arguable case in second appeal. The Court held that denial of interim protection in such a case may render the appeal ineffective, and that equitable relief can be granted under Article 226 to preserve the subject matter pending adjudication.

Conclusion: Stay of collection of the remainder of the disputed tax was justified pending disposal of the appeal.

Final Conclusion: The writ petition succeeded to the extent of interim protection, and collection of the balance disputed tax was directed to remain suspended till the appeal was decided.

Ratio Decidendi: Where the statute does not expressly prohibit interim protection in a second appeal and the appellant shows a strong arguable case, writ jurisdiction may be invoked to stay collection of the disputed tax to prevent the appeal from becoming nugatory.

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