Andhra Pradesh High Court - Amravati
M/S. Vishnu Carriers Pvt. Limited, vs The Commercial Tax Officer, on 30 September, 2021
Author: Joymalya Bagchi
Bench: Joymalya Bagchi
THE HON'BLE SRI JUSTICE JOYMALYA BAGCHI
AND
THE HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI
WRIT PETITION No.21909 of 2021
(Taken up through video conferencing)
ORDER:(Per Hon'ble Sri Justice Joymalya Bagchi) Petitioner has approached this Court challenging order dated 18.02.2021 passed by the 2nd respondent refusing to direct stay of collection of remainder of disputed tax to the tune of Rs.4,79,010/- pending appeal before the Andhra Pradesh Value Added Tax Appellate Tribunal, Visakhapatnam Bench, Andhra Pradesh (for short, 'the Tribunal').
Sri A.Sarveswar Rao, learned counsel appearing for the petitioner, submits that the 2nd respondent failed to consider relevant clauses in the lease agreement which shows that control of the buses in question lay with the petitioner. It is also submitted that his client has deposited 50% of the tax in dispute at the time of filing of the appeal.
In response, Sri Sekhar, learned Government Pleader for Commercial Tax, submits that the 2nd respondent does not have jurisdiction to entertain the stay application pending hearing of appeal before the Tribunal under Section 33 of the Andhra Pradesh Value Added Tax Act, 2005 (for short, 'the Act').
Power of the 2nd respondent to grant stay pending appeal before the Tribunal is provided under Section 33(6) of the Act, which reads as follows:
"33(6)(a) Where a VAT dealer or TOT dealer or any other dealer, objecting to an order passed or proceeding recorded by a Deputy Commissioner under Section 21 or 32 has preferred an appeal to the Appellate Tribunal, the Additional Commissioner, or the Joint Commissioner may, 2 on an application filed by the dealer, subject to such terms and conditions, as he may think fit, order stay of collection of the tax under dispute pending disposal of the appeal by the Appellate Tribunal.
(b) The payment of tax and penalty, if any, due in accordance with the order of the first appellate authority or of the Deputy Commissioner under Section 21 or in revision under Section 32, in respect of which an appeal has been preferred under sub-section (1), shall not be stayed pending disposal of the appeal."
A plain reading of the aforesaid provisions would show that such power would be exercised by the 2nd respondent only when an appeal is preferred against an order or proceedings recorded by the Deputy Commissioner under Section 21 or 32 of the Act and not otherwise. In the present case, a second appeal has been preferred against an order passed by the first appellate authority under Section 31 of the Act and therefore, in our considered opinion, the 2nd respondent did not have jurisdiction to entertain an application for stay of collection of tax pending such appeal.
With regard to the issue whether the remainder of the tax in dispute may be stayed or not pending appeal before the Tribunal under Section 33 of the Act, it may be apposite to refer to Sub- Section (3) of Section 31 of the Act, which reads as follows:
"(3)(a) Where an appeal is admitted under sub-
section (1), the appellate authority may, on an application filed by the appellant and subject to furnishing of such security or on payment of such part of the disputed tax within such time as may be specified, order stay of collection of balance of the tax under dispute pending disposal of the appeal;
3 (b) Against an order passed by the appellate authority refusing to order stay under clause (a), the appellant may prefer a revision petition within thirty 3 days from the date of the order of such refusal to the Additional Commissioner or the Joint Commissioner who may subject to such terms and conditions as he may think fit, order stay of collection of balance of the tax under dispute pending disposal of the appeal by the appellate authority.
3 (c) Notwithstanding anything in clause (a) or
(b), where a VAT dealer or TOT dealer or any other dealer has preferred an appeal to the Appellate Tribunal under Section 33, the stay, if any, ordered under clause (b) shall be operative till the disposal of the appeal by such Tribunal, and, the stay, if any ordered under clause (a) shall beoperative till the disposal of the appeal by such Tribunal, only in case where the Additional Commissioner or the Joint Commissioner on an application made to him by the dealer in the prescribed manner, makes specific order to that effect."
Sub-Section (3)(c) of Section 31 of the Act provides in the event realisation of remaining tax in dispute is stayed by the Additional Commissioner or Joint Commissioner under Sub- Section (3) (b), the stay shall continue till disposal of the appeal before the Tribunal and in the event the stay had been granted by the first appellate authority under Sub-Section (3)(a) of Section 31, the same upon being affirmed by the Additional Commissioner or Joint Commissioner concerned under Sub-Section (3)(b) of Section 31 of the Act would continue till disposal of the appeal. The Act is, however, silent with regard to cases where no stay order had been passed during hearing of the first appeal or where the stay had been refused by the first appellate authority or Additional Commissioner/Joint Commissioner as the case may be, under Sub-Section (3)(a) or (3)(b) of Section 31 of the Act. The Act also 4 does not contain any express prohibition in granting stay of collection of remainder tax pending second appeal in such cases provided the facts of the case justify such relief.
When a litigant has a right to prefer a second appeal against an order passed by the first appellate authority, it would be wholly unjust to say that he would have no right to seek suspension of collection of the remaining tax in dispute pending such appeal in appropriate cases where a strong arguable case is made out in his favour. If so, the second appeal would be rendered infructuous and extreme prejudice would be caused to the appellant. Keeping this in mind we are of the view in cases where no order of stay of collection of remaining tax was passed in favour of the appellant under Sub-Section (3)(a) or (3)(b) of Section 31 of the Act and the appellant makes out a strong arguable case in second appeal, this Court in exercise of its extraordinary writ jurisdiction may direct suspension of collection of remaining of the tax in dispute pending disposal of the appeal subject to such terms and conditions as this Court may consider fit and proper. We are further fortified to come to such conclusion as there is no express embargo engrafted in the law prohibiting stay of collection of remaining tax pending hearing of the second appeal apart from sub-section 3(c) of Section 31 of the Act.
We have examined the factual matrix of the case in issue. Interpretation of terms of the lease agreement between assessee and the hirer require to be gone into in the course of second appeal. It has been argued that terms if properly construed would not make him liable to tax under Sub-Section (8) of Section 4 of the Act inasmuch as he had control and dominion over the buses 5 in question. Although the 2nd respondent has referred a decision of this Court in G.S.Lamba and Sons, Secunderabad and others Vs. State of A.P.1, it is a matter to be examined in the course of appeal whether the tests applied are satisfied in the factual matrix of the present case.
In the light of the aforesaid reasons, we are of the opinion that the petitioner has made out a strong arguable case in appeal. Accordingly, in order to balance the equities between the parties, in exercise of our power under Article 226 of the Constitution of India we are inclined to direct that there shall be stay of collection of the remainder of the disputed tax to the tune of Rs.4,79,010/- till the disposal of the appeal. We make it clear we have not expressed any opinion with regard to the merits of the case which is kept open to be decided by the Tribunal in accordance with law.
With these directions, the Writ Petition is disposed of. There shall be no order as to costs.
As a sequel, Miscellaneous Petitions, if any, pending in this Writ Petition shall stand closed.
_________________________ JOYMALYA BAGCHI, J ________________________________ KONGARA VIJAYA LAKSHMI, J Date: 30.09.2021 Ivd 1 52 STJ 191 6 THE HON'BLE SRI JUSTICE JOYMALYA BAGCHI AND THE HON'BLE SMT JUSTICE KONGARA VIJAYA LAKSHMI WRIT PETITION No.21909 of 2021 (Per Hon'ble Sri Justice Joymalya Bagchi) Dated: 30.09.2021 Ivd