Maharashtra Sales Tax Tribunal stays levy of Balance Amount until the Disposal of VAT Appeal as 10% Mandatory Deposit is made [Read Order]

The appellant M/s. Work Stores Ltd. is a reseller of office stationery, furniture, and computer and software, etc. The appellant was assessed by the Deputy Commissioner of Sales Tax, Refund Audit Branch. The assessment resulted in net VAT payable of Rs.67,99,541/- and total demand of Rs.1,46,19,011/- against which the appellant had filed an appeal to the Joint Commissioner of Sales Tax(Appeal) i.e. First Appellate Authority. The appeal order resulted in a refund of Rs.9,56,848/-along with interest U/s.52 on refund to Rs.1,14,820/- resulting in the total refund of Rs.10,71,668/-. This appeal order was reviewed by the Additional Commissioner of Sales Tax, wherein the Additional Commissioner of Sales Tax disallowed the sale of gift vouchers allowed as tax-free by the First Appellate Authority. As a result, the review order resulted in net tax demand of Rs.10,14,556/- and a total demand of Rs.56,49,000/-.

On behalf of the revenue, it has been submitted that the appellant needs to pay the amount of disputed tax which comes to Rs.1,01,455/-. The appellant should pay 100% of the cash refund wrongly granted to the appellant at Rs.10,71 668/-. As a result, it has been submitted on behalf of the revenue that the appellant needs to make part payment of Rs.11,73,123.

The two-member bench of C.M.Kamble and Dr. CA Nathani on going through the relevant Section 26 B observed that there is no statutory backing to the submission made on behalf of revenue to the effect that the applicant needs to pay 100% of the refund wrongly granted to him as this is precisely the amount of tax which the appellant has agitated against at the first appellate stage as well as is agitating before the Tribunal. Hence, the refund amount which has been granted to the appellant needs to be considered as a disputed amount of tax. In view of the statutory provision of Section 26(6B)(C) which provides that an amount equal to 10% of the balance amount of disputed tax which remains outstanding needs to be paid.

“We are inclined to accept the submission made on behalf of the appellant by the learned Chartered Accountant as per sub. Sec.26(6B)(c), the 10% part payment needs to be applied on total tax payable including a refund of tax added which comes to Rs.19,71,404/- and on this amount, the appellant needs to make part payment @10% at Rs.1,97,140/-. The appellant has already made part payment of Rs.2,08,623/- calculated at 10% of the balance amount of disputed tax payable. Accordingly, accepting the contention of the appellant that he has made part payment of more than the required amount of tax payable as per the provisions of law, we proceed to accept the say of the appellant and accordingly stay for the balance amount is being granted,” the Tribunal said.

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.