Remittance of 25% of Disputed Tax: Telangana HC notes further burden cannot be imposed during Pendency of Appeal [Read Order]

In a recent decision the Telangana High Court noted that further burden cannot be imposed during pendency of appeal on remittance of 25% of disputed tax.

The petitioner, SAS Infra Projects India PVt Ltd, is a private limited company and a registered dealer under the Telangana Value Added Tax Act, 2005 (VAT Act), the assessing officer being respondent No.4. the Petitioner is engaged in the business of preparation of ready mix concrete and execution of earth works.

For the assessment period 2009-2010 to 2010- 2011, the respondentpassed an order holding that an amount of Rs.1 lakhs was excess tax paid by the petitioner.

In the show cause notice it was alleged that insurance claim received by the petitioner was a taxable item. Further, it was proposed to levy tax on the sale of old tyres and oil as well as scrap items sold by the petitioner. Besides, the respondent also proposed to levy tax on transportation charges etc.

The Petitioner submitted reply to the respondent objecting to the proposals made. It is stated that without considering the reply of the petitioner and without granting personal hearing, respondent passed the order revising the order for the aforesaid tax period raising a demand of Rs.14 lakhs.

Being aggrieved, petitioner preferred appeal before the Telangana Value Added Tax Appellate Tribunal (Tribunal) constituted under Section 33 of the VAT Act. For maintaining the appeal before the Tribunal, petitioner paid 25% of the disputed tax which was a pre-condition.

The Bench comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji observed that “Merely because petitioner has availed the remedy provided by the statute, there should not be additional burden on the petitioner. Having regard to the fact that petitioner has already deposited 25% of the disputed tax and considering the fact that the larger issue is pending consideration before this Court, we are of the view that insisting on further payment by the petitioner during the pendency of the appeal would not be just and proper.”a

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