1986 (9) TMI 391 - HC - VAT and Sales Tax

Summary

Issues:
- Stay of recovery of long-standing sales tax demand for assessment years 1972-73 and 1973-74 during the pendency of the revision before the Commercial Taxes Tribunal, Bihar.

Analysis:
1. The petitioner, a company, sought a stay on the recovery of sales tax demand for the years 1972-73 and 1973-74. The assessments were revised by the Additional Assistant Commissioner under the Bihar Sales Tax Act, resulting in a tax of 12% on certain transactions deemed inter-State sales. The petitioner appealed to the Deputy Commissioner of Commercial Taxes and obtained a conditional stay order for the balance of taxes demanded. Subsequently, the High Court granted interim relief staying the recovery with a condition to pay 20% of the assessed tax.

2. The petitioner then filed a writ petition against the conditional stay order, which was dismissed by the Deputy Commissioner of Commercial Taxes. The petitioner appealed to the Commercial Taxes Tribunal, Bihar, seeking a stay during the pendency of the hearing. The Tribunal, considering the Supreme Court's previous stay order only until the appeal's disposal, found no adequate grounds for further stay for the assessment years 1972-73 and 1973-74.

3. The petitioner's counsel argued for a stay on the recovery of sales tax dues despite the Tribunal's jurisdiction over the revision, citing the quantum of tax dues. However, the Court rejected this argument, stating that the tax dues were not disproportionate to the petitioner's business size and financial standing. The Court highlighted the recent approach to granting stays in fiscal matters, emphasizing the need for timely tax realizations to prevent economic disruptions.

4. Referring to authoritative judgments, the Court emphasized the importance of avoiding prolonged stays on tax realizations for the country's economic stability. The Court noted that the Supreme Court's guidance on refraining from passing interim orders hindering tax realizations was binding on High Courts. Consequently, the Court found no merit in the writ petition and dismissed it summarily.

5. The Court's decision to dismiss the writ petition in limine was based on the binding nature of the Supreme Court's guidance regarding stays on tax realizations. The Court upheld the principle of timely tax collections for economic stability and found no grounds to grant the requested stay on recovery of sales tax dues.

Conclusion:
The High Court dismissed the writ petition seeking a stay on the recovery of sales tax demand for the assessment years 1972-73 and 1973-74, emphasizing the need for timely tax realizations and adhering to the Supreme Court's guidance on avoiding prolonged stays on tax collections.