A division bench of the Telangana High Court has held that the power of the authorities under the Telangana VAT Act, 2005 is discretionary and the same shall be exercised in a fair and judicious manner balancing the interest of both the sides.
Petitioner was a registered dealer under the Telangana Value Added Tax Act, 2005. For the assessment period 2016-17 to 2017-18, 3rd respondent passed assessment order dated 26.03.2021 levying a higher rate of tax on the goods supplied by the petitioner. Instead of 5%, it was held that the goods were liable to be taxed at the rate of 14.5%.
Aggrieved by the assessment order dated 26.03.2021, the preferred appeal along with a stay petition before the 2nd respondent. For admission of the appeal, petitioner deposited the pre-requisite of 12½%. The authorities rejected the stay petition filed by the petitioner during the pendency of the appeal.
After hearing the arguments from both the sides, Justice Ujjal Bhuyan and Justice Surepalli Nanda observed that both the appellate authority as well as the revisional authority were not justified in out-rightly rejecting the prayer for stay of the petitioner.
“Power to entertain prayer for stay is incidental and ancillary to the power to hear appeal and revision. It is a discretionary power, which is required to be exercised in a fair and judicious manner balancing the interest of both the sides. Since petitioner has already deposited 12½% of the disputed tax for the purpose of admission of the appeal, we are of the view that if the petitioner deposits a further amount of 12½% of the disputed tax, respondents shall not take coercive steps for recovery of the entire outstanding dues in terms of the order of assessment,” the Court observed.
Granting stay order in favour of the petitioner, the Court observed “that being the position and upon thorough consideration of the matter, we direct that if the petitioner deposits further 12½% of the disputed tax within a period of 30 days from today, the demand in terms of the assessment order dated 26.03.2021 shall remain stayed till disposal of the appeal pending before respondent No.2.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
