2022 (2) TMI 406 - HC - VAT and Sales Tax

Court Grants Interim Stay on VAT Recovery, Cites Payment & Appeal Factors

M/s. Pearl Bottling Pvt. Ltd., Versus The State of Andhra Pradesh, Joint Commissioner (CT) Legal, Andhra Pradesh., Appellate Deputy Commissioner, Vijayawada, Assistant Commissioner (CT) (INT & LTU), Visakhapatnam, Deputy Commercial Tax Officer, Anakapalle Circle,

The Court granted interim stay of the remaining 50% of the demanded amount in a VAT and penalty recovery case. The petitioner's appeal to the Tribunal and ... Rejection of prayer for grant stay of the remaining outstanding demand - HELD THAT:- The Court finds substance in the submissions of learned counsel for the petitioner. From the urgent notice, it appears that the same has been issued after almost 16 months of the order by which stay was rejected. Since the order of rejection, dated 28.08.2020 is not before the Court, this Court is unable to go into the aspect as to whether the authority has applied its mind and considered the relevant factors before declining to grant stay. However, since the petitioner has already moved before the Tribunal and has paid 50% of the demand, as also the fact that a Coordinate Bench has taken a view with regard to declining grant of stay even though 50% of payment had been made and has granted stay, we are inclined to adopt the same. This writ petition stands disposed of by directing that there shall be interim stay of the remaining 50% of the demanded amount till disposal of the appeal filed by the petitioner before the Tribunal. The Tribunal is also requested to dispose of the appeal at the earliest. Issues:1. Petition filed for relief against proceedings seeking recovery of VAT and penalty.2. Rejection of stay of outstanding demand by the Tribunal.3. Justification for rejection of stay when 50% of disputed amount already paid.4. Comparison with a previous case where stay was granted.5. Exercise of discretion by the authority in considering the prayer for stay.Analysis:The petitioner filed a writ petition seeking relief against the proceedings initiated to recover VAT and penalty. The petitioner had moved an appeal before the Tribunal and paid 50% of the disputed amount. However, the stay of the remaining outstanding demand was rejected by the Tribunal. The petitioner argued that there was no justification for this rejection, especially when the petitioner had a strong case on merit and had already made a substantial payment. The petitioner highlighted a previous case where under similar circumstances, the Tribunal had granted a stay with directions for expeditious disposal of the appeal.The respondents contended that the authority had the discretion to consider the prayer for stay and had exercised it after due consideration. The Court, after considering the submissions of both parties, found merit in the petitioner's arguments. It noted that the urgent notice regarding the rejection of stay was issued after a significant delay of 16 months, making it difficult to assess whether the authority had properly evaluated the relevant factors before denying the stay. Given that the petitioner had already approached the Tribunal and paid 50% of the demand, and in light of the previous decision of a Coordinate Bench granting stay in a similar situation, the Court decided to grant interim stay of the remaining 50% of the demanded amount until the appeal before the Tribunal was resolved.The Court clarified that its decision to grant interim stay did not imply any opinion on the merits of the case. The writ petition was disposed of with the direction for interim stay, and the Tribunal was urged to expedite the appeal process. Any miscellaneous petitions pending were also disposed of as part of the judgment.