2021 (11) TMI 166 - HC - VAT and Sales Tax

Court overturns orders imposing 20% deposit condition for stay petitions under Kerala Taxes Act

The Court set aside orders lacking reasons for imposing a 20% deposit condition for stay petitions under the Kerala Taxes on Luxuries Act. Orders passed ... Validity of assessment order - orders granting conditional stay on the ground that the same are not speaking orders - principles of natural justice - HELD THAT:- Since Ext.P10 order relating to the appeal filed against assessment years 2014-15 is passed on consent, the petitioner is not entitled to challenge the same. The consent as endorsed in the order impugned, deprives the petitioner the basis for challenging such an order. Hence challenge against Ext.P10 fails. On a perusal of orders impugned, it can be seen that the amount directed to be deposited in the three cases in Ext.P10(a), P10(b) and P10(c) are not substantial part of the demand, but are only 20% of the demand raised and on that basis, the said judgment of the Supreme Court could be distinguished. However, in M/S ARCHANA AGENCIES VERSUS THE COMMERCIAL TAX OFFICER AND DEPUTY COMMISSIONER [2014 (5) TMI 1024 - KERALA HIGH COURT], the learned single Judge of this Court had held that the requirement of giving reasons, although minimal in stay orders in matters of taxation, the same cannot be understated and also that the duty to give reasons is only conducive to fairness - the learned single Judge of this Court in the decision in SHYLA PUSHPAN, K.P. PUSHYA AND K.P. SHAN VERSUS THE COMMISSIONER INCOME TAX (APPEALS) , THRISSUR, THE DISTRICT COLLECTOR, THRISSUR AND INCOME TAX OFFICER, WARD NO. 2 (4) , THRISSUR [2019 (10) TMI 519 - KERALA HIGH COURT] had, in an identical case where condition to pay 20% of the demand was imposed for grant of stay was challenged, the same was set aside and fresh consideration was directed due to absence of reasons. Exts.P10(a), P10(b) & P10(c) relating to the assessment years 2015-16, 2016-17 and 2017-18 shall stand set aside and the Tribunal shall pass fresh orders after hearing the petitioners - Petition allowed in part. Issues:Challenging assessment orders under Kerala Taxes on Luxuries Act for assessment years 2014-15, 2015-16, and 2016-17. Appeal before statutory appellate authority. Modification of assessment orders evidenced by Exts.P5 and P6. Second appeal before Kerala Value Added Tax Appellate Tribunal. Stay petition filed with appeals. Orders granting conditional stay challenged on grounds of lack of reasons. Distinction between orders passed on consent and those issued as orders of the Court.Analysis:The petitioner challenged assessment orders under the Kerala Taxes on Luxuries Act for the years 2014-15, 2015-16, and 2016-17 by filing appeals before the statutory appellate authority. The appellate authority modified the assessment orders as evidenced by Exts.P5 and P6, with Ext.P5 relating to 2015-16 and Ext.P6 relating to 2014-15, 2016-17, and 2017-18.Aggrieved by the first Appellate Authority's orders, the petitioner filed a second appeal before the Kerala Value Added Tax Appellate Tribunal, Additional Bench, Kottayam, as shown in Ext.P7 series. Stay was granted on the condition of depositing 20% of the demand alongside the appeals. The petitioner challenged the orders granting conditional stay, arguing that they lacked reasoning for imposing the 20% deposit condition.The petitioner's counsel relied on various legal decisions to support the contention that even for a conditional stay order, reasons must be provided, citing the consistent requirement of giving reasons by the Court and the Supreme Court. The Government Pleader, however, argued that detailed reasons were not necessary at the stay grant stage, distinguishing the cited legal precedents.The impugned orders granting conditional stay, specifically Ext.P10, were passed on consent, leading the Court to conclude that the petitioner could not challenge this order. However, the challenge against orders Exts.P10(a), P10(b), and P10(c) stood on a different footing as they were not passed on consent but as orders of the Court.The Court analyzed the orders in Ext.P10(a), P10(b), and P10(c) against legal precedents and found that they lacked reasons for imposing the 20% deposit condition. Consequently, the Court set aside these three orders and directed the Tribunal to pass fresh orders after hearing the petitioners. Ext.P10 order, passed with consent, was not interfered with, but a two-week period was granted for the petitioner to deposit the required amount. Recovery for the years 2015-16, 2016-17, and 2017-18 was deferred pending the Tribunal's new orders on the stay petition.In conclusion, the writ petition was allowed in part, setting aside the impugned orders lacking reasons and granting relief to the petitioner for fresh consideration.