The Madras High Court in M/s. Surya Service Station v. CTO, invalidated the Appellate Tribunals’ order granting conditional stay on penalty case against the assesse by considering the fact that the Assessee has already discharged its entire tax liability under the Tamil Nadu Value added Tax Act.
The sole grievance of the Petitioner was that the Tribunal, while granting stay of the disputed penalty in each case, directed them to pay 15% of the said penalty amount within one month.
While allowing the petition, Justice Ravichandra Babu directed the Tribunal to take up the appeal itself for final disposal.
The petitioner challenged the conditional stay granted by the Tribunal contending that they have paid the entire tax liability without prejudice to their contentions in the Appeal and therefore, the Tribunal is not justified in further directing the payment of 15% of the penalty as a condition for granting stay, pending disposal of the appeal.
The Court said that “it is not in dispute that the said Appeal filed before the Tribunal is challenging the imposition of tax and penalty. It is also not in dispute that without prejudice to the contention, the petitioners have paid the entire tax liability even before filing the appeal. Therefore, this Court is of the considered view that the appeal itself can be taken up and decided, so that the Appellate Tribunal can come to a conclusion as to whether the very imposition of tax is justified or not and consequently, to come to a conclusion on the question of imposition of penalty as well.”
Read the full text of the Order below.
