Stay of Demand: HC Stays demand to 15% where appeal is pending to be adjudicated on merits

Heard Sri Nishant Mishra, learned counsel for the revisionist and Sri R.S. Pandey, learned Standing Counsel for the State.

This revision has been preferred against the order passed on the stay application by the Tribunal granting relief of 75% waiver of disputed amount of tax to be deposited before the appeal is finally decided by first appellate authority. The assessment was made ex-parte vide order dated 19.03.2021. Against which a recall application was moved by the assessee and the matter was reopened. Thereafter, an assessment was made and a tax liability of Rs.1,89,89,122/- was imposed against the revisionist. Against the said order, a first appeal was preferred along with a stay application before the Additional Commissioner Grade-II (Appeal)-IIIrd State Tax, Ghaziabad. The first appellate authority reduced the quantum of the tax to be deposited before entertaining of the appeal to the tune of 50% by order dated 12.10.2022. Against the order passed on the stay application, the assessee preferred a second appeal before the Commercial Tax Tribunal, Ghaziabad Bench-Ist, Ghaziabad and the Tribunal vide order dated 03.11.2022 has reduced the quantum and had directed that the assessee was required to deposit 25% of the disputed amount of tax and rest of 75% of the dispute amount of tax was stayed.

Learned counsel for the revisionist submitted that order passed was ex-parte and quantum of turn over has been enhanced without issuing notice as mandated under Section 28(3) and (4)of the Value Added Tax Act.

On the contrary, learned Standing Counsel has invited the attention of the Court to assessment order dated 16.09.2022 wherein a finding has been recorded by assessing authority that initially the assessment order was passed ex-parte but subsequently on the application moved under Section 32 of VAT Act, case was reopened and assessee has placed before the assessing authority all the material and after considering it assessment order was passed.

After hearing counsel for the parties, this Court finds that the appeal is still pending before the Additional Commissioner which has to be adjudicated on merits. In view of said fact, taking a lenient view, this Court directs that on the deposit of 15% of the total tax liability within a period of 15 days from today, the first appellate authority shall hear and decide the appeal in accordance with law after affording opportunity to both the parties, within a period of next one month.

The order of Tribunal dated 03.11.2022 is modified to the extent indicated above and revision stands partly allowed.

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