The Madras High Court directed to accept Personal Bond in lieu of Bank Guarantee as condition for stay of assessment order in relation to payment of Value Added Tax (VAT).
The petitioner in the matter is Royal Welding Wires Private Limited.
The Petition was filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus to call for the impugned proceedings of the first respondent passed and to quash the same insofar as directing the petitioner to furnish Bank Guarantee for balance tax amount of Rs.19 lakhs and Rs.7 lakhs and further direct the second respondent.
The petitioner is aggrieved by the conditions imposed by the first respondent while granting stay of the impugned assessment orders in the Appeals filed by them. In similar circumstances, the Court by its Order in the case of M/s.AMC Traders vs. The Appellate Deputy Commissioner (ST) (FAC) and another granted a similar relief as sought for in these writ petitions by following another decision of the Madurai Bench of the Court in the case of M/s.Arasan Syntex Ltd. Vs the Appellate Authority/ Deputy Commissioner and another.
In the aforesaid decision, there was a direction by the Appellate Authority to the assessee to furnish Bank Guarantee as a condition for grant of stay of the impugned assessment orders and the same was substituted by a Personal Bond executed by the assessee.
The Court of Justice Abdul Quddhose observed that “Since the petitioner is also similarly placed, this Court is inclined to grant a similar order as was granted by the Madurai Bench of this Court in the aforesaid decision.”
The Court directed the first respondent to accept the Personal Bond of the petitioner for the sum of Rs.19 lakhs in respect of the assessment year 2016-17 and Rs.7 lakhs in respect of the assessment year 2017-18 in lieu of the Bank Guarantee amounts, mentioned in the impugned orders dated 02.02.2023 and 30.01.2023 and the petitioner is directed to execute a Personal Bond as directed supra, within a period of one week from the date of receipt of a copy of the order.
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