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2013 (4) TMI 558 - HC - VAT and Sales TaxAbsolute stay of collection of balance of tax and penalty seeked without imposing any condition of furnishing of valid security in the form of Bank Guarantee pending disposal of the appeal - petitioner was assessed by arriving deemed sales value on the ground that the petitioner has effected purchase of lubricant oils and that the petitioner has not reported such sales and accordingly imposed tax and penalty - Held that - On a perusal of the entire order passed by Appellate Deputy Commissioner, it is revealed that much indulgence has been shown by them keeping in mind that the merits of the case will be ascertained only in subsequent hearings of the case and the final outcome of the appeal is not of immediate imminence to the authority. After taking into account the balance of convenience between the parties and also the interest of the Revenue, the first respondent concluded that 25% of the disputed amount of the tax due, has to be paid by the petitioner on or before 20.03.2013 and with regard to the balance tax and penalty the petitioner was directed to file valid security in the form of Bank Guarantee obtained from any of the Nationalised Banks executed in favour of the Assessing Authority. Thus the indulgence shown by the Assessing Authority in a lenient way cannot be questioned by the petitioner, in this writ petition. The factors to be followed while granting waiver on any conditions have been scrupulously followed by the respondents, in ordering the said petition thus warrants no interference. The only hardship expressed by the petitioner is that the petitioner-Company is a service provider, carrying on the job of operation and maintenance in their petrol bunk premises and their financial condition may be taken note of thus it would be possible only to the extent of ordering modification in the order of stay that the petitioner shall pay a sum being 25% of the disputed amount of tax due before the Assessing Authority. Out of the balance tax and penalty totaling the petitioner shall furnish bank guarantee for 50% of the said amount and for the remaining 50% of amount, he shall execute a personal bond within a period of two weeks from the date of receipt of a copy of this order. The default condition imposed by the appellate authority remains unaltered.
Issues:
Challenge to quash an order for tax and penalty, seeking absolute stay without providing valid security in the form of Bank Guarantee pending appeal. Analysis: The petitioner, engaged by Indian Oil Corporation Limited, challenged an order assessing tax and penalty for the purchase of lubricant oils, contending that the purchases were related to IOCL and objected to the liability imposed. The petitioner filed an appeal seeking absolute stay of the tax and penalty. The appellate authority directed the petitioner to pay 25% of the disputed tax and provide a Bank Guarantee for the remaining amount. The petitioner faced financial difficulties in complying with the security requirement. The court noted the petitioner's financial hardship and the grounds raised in the appeal. The appellate authority's order of stay was considered lenient, balancing the interests of both parties and the Revenue. The court found no grounds to question the authority's decision, emphasizing that the merits of the case would be determined in subsequent hearings. The petitioner's status as a service provider was acknowledged, leading to a modification in the order to ease the financial burden. In conclusion, the court modified the order to require the petitioner to pay 25% of the tax, provide a Bank Guarantee for 50% of the remaining amount, and execute a personal bond for the rest within two weeks. The court disposed of the writ petition with no costs, recognizing the petitioner's financial constraints while upholding the authority's decision to grant a stay with conditions.
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