Madras High Court
M/S.Uttam Marketing vs The Appellate Deputy Commissioner (Ct) ... on 23 January, 2014
Author: V. Dhanapalan
Bench: V. Dhanapalan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 23.01.2014 CORAM: THE HON'BLE MR.JUSTICE V. DHANAPALAN W.P.Nos.541 to 543 of 2014 M/S.UTTAM MARKETING REP. BY ITS PARTNER, NO.35/3, REDDY RAMAN STREET, RAJENDIRA COMPLEX, CHENNAI 79. ... Petitioner in all the petitions -vs- 1. THE APPELLATE DEPUTY COMMISSIONER (CT) II (FAC), CHENNAI-6. 2. THE ASSISTANT COMMISSIONER (CT), SOWCARPET-II ASSESSMENT CIRCLE, NSC BOSE ROAD, CHENNAI .. Respondents in all the petitions Common Prayer: Writ petitions are filed under Article 226 of Constitution of India for issuance of a writ of Certiorarified Mandamus, calling for the records of the 1st respondent in S.P.Nos.48/13, 47/13 and 46/13in VAT A.Ps.65/13, 64/13 and 63/13 dated 27.11.2013, quash the same and further direct the 1st respondent to grant an absolute stay for the balance of tax amount without insisting upon furnishing of bank guarantee till the pending disposal of the appeals. For Petitioner : Mrs.C.Rekha Kumari For Respondents : Mr.A.R.Jaya Prathap Addl. Govt. Pleader (Tax) ***** C O M M O N O R D E R
By consent, the writ petitions are taken up for final disposal at the stage of admission itself.
2. Heard Mrs.C.Rekha Kumari, learned counsel appearing for the petitioner and Mr.A.R.Jaya Pratahp, learned Additional Government Pleader (Tax) for the respondents.
3. These writ petitions are directed against orders dated 27.11.2013, on the file of Appellate Deputy Commissioner (Commercial Tax), Chennai imposing a condition that the petitioner should produce Bank Guarantee for the tax amount during the currency of the appellate proceedings.
4. For the sake of brevity, facts are being taken from W.P.No.541 of 2013, as common question involved in these writ petitions. The facts leading to filing of these writ petitions read as follows:
i)The petitioner is a dealer in electronic goods, such as parts and accessories of computers. In the course of business, the petitioner received incentives and discounts from the suppliers based on lifting the stocks. Such incentives and discounts are in no way connected with the tax already paid by the petitioner to its suppliers. The impugned assessment year in dispute is 2009-2010 under TNVAT Act and issue centre around the reversal of ITC on receipt of incentives and discounts on the ground that the petitioner has not filed the reply.
ii)The petitioner states that it had availed ITC of the actual amount of tax paid by it and the same is adjusted towards the output tax payable on sales. The 2nd respondent reversed the claim of ITC on the ground that the petitioner has received discount through credit notes and passed on some portion of the discount to the customers. Against the proposal notice, the petitioner had filed a detailed reply but the same was overlooked and proposal was confirmed by reversing huge ITC. The validity of the provision of Section 19(20) of TNVAT Act 2006, was challenged before this Court and the validity was upheld in Jayam & Co., against which the matter has been taken by way of SLP before the Hon'ble Supreme Court of India and it is pending for disposal. So, in view of the pendency of matter before the Apex Court, the 2nd respondent ought to have kept the matter in abeyance. But, instead of doing so, he rushed through in completing the revision of assessment.
iii)The petitioner filed an appeal before the first respondent challenging the Assessment order passed by the second respondent. The appeal was taken on file by the first respondent along with a stay petition filed by the petitioner. The Appellate Authority was pleased to grant an order of stay, directing the petitioner to pay another 25% of the disputed amount of tax of Rs.71,410/- before the Assessing Authority on or before 26.12.2013. The Appellate Deputy Commissioner, imposed a further condition directing the petitioner to produce Bank Guarantee with respect to the balance amount of tax.
iv)It is submitted by the petitioner that entire liquidity is blocked in the stock available in the business premises and due to recession and fluctuation in dollar verses rupee, the petitioner was unable to move the stock as the stock that was purchased at higher price cannot be sold at lower price. Therefore, the petitioner had to hold the stock purchased at higher price and buy fresh stock for making couinter sales. The bankers are also insisting upon 100% deposit to give bank guarantee and for such deposit there is no enough circulation of money with the petitioner. The amount involved is huge and the petitioner is not in a position to file security and thus, the said onerous condition is challenged in this writ petition.
5. The impugned orders have been challenged by the petitioner on the followings grounds:
a) that the order of the 1st respondent is contrary to law and opposed to the facts and circumstances of the case and the 2nd respondent erred in levying tax on the discount and incentives received during the impugned year, without even considering the aspect that such receipts from the suppliers do not form part of sales turnover;
b) that when the matter is pending before the Hon'ble Supreme Court, stay ought to have been granted by the 1st respondent without insisting upon any security and the respondents failed to consider the aspects laid down by this Court to the effect that the appellate authority is bound to consider prima facie case of the dealer, its capacity to pay the amount, merits of the case and the amount involved in the said case.
6. I have heard the learned counsel for the petitioner and the learned Additional Government Pleader (Tax) appearing for the respondents.
7. The present writ petitions are confined to the direction with regard to execution of bank Guarantees for the balance amount of disputed tax. The details are as under:
Writ Petition No. Disputed Tax already paid Balance Amount to be paid towards Disputed Tax W.P.No.541 of 2014 Rs.71,410/-
Rs.2,14,216/-W.P.No.542 of 2014
Rs.90,150/-
Rs.2,70,447/-W.P.No.543 of 2014
Rs.61,725/-
Rs.1,85,178/
8. The petitioner has already deposited 25% of the disputed amount of tax pursuant to the direction given by the Appellate Deputy Commissioner. In addition to the deposit of 25%, the Appellate Deputy Commissioner, directed the petitioner to produce Bank Guarantee for the remaining amount of tax and penalty.
9. This Court has passed several orders on earlier occasions substituting the condition with regard to execution of Bank Guarantee by permitting the concerned appellants to produce personal bonds, undertaking to pay the entire amount , in case the appeal is rejected.
10. The petitioner in these three petitions is also similarly placed and therefore, I am of the view that the petitioner should be permitted to execute personal bonds instead of Bank Guarantees.
11. In the result, the respective impugned orders are modified by permitting the petitioner to execute personal bonds undertaking to pay the balance amount of disputed tax of Rs.2,14,216/- against W.P.No.541 of 2013, Rs.2,70,447/- against W.P.No.542 of 2013 and Rs.1,85,178/- against W.P.No.543 of 2013. Accordingly, the petitioner is directed to execute personal bonds within a period of two weeks from the date of receipt of a copy of this order and in case of execution of such personal bonds, the order of stay granted by the first respondent would be in force, till the disposal of the statutory appeal.
12. The writ petitions are disposed of accordingly. No costs. Consequently, the connected miscellaneous petitions are closed.
23.01.2014 Index: Yes Internet: Yes ar V. DHANAPALAN,J., ar To
1. THE APPELLATE DEPUTY COMMISSIONER (CT) II (FAC), CHENNAI-6.
2. THE ASSISTANT COMMISSIONER (CT), SOWCARPET-II ASSESSMENT CIRCLE, NSC BOSE ROAD, CHENNAI W.P.No.541 to 543 of 2014 23.01.2014