2020 (7) TMI 743 - HC - VAT and Sales Tax

Continuation of proceedings after the end of the assessment year - section 29(6) of UP VAT Act - HELD THAT - When the First Appeal was being heard and the applicant s case was that no proceeding against him could be continued as per section 29(6) of the Act then a complete stay of the recovery ought to have been there. Under such circumstances it is being provided that while the First Appeal would be heard and decided within a period of four months from the date of presentation of this order the disputed demand as was being made by the Department shall remain stayed for a period of four months or till the disposal of the First Appeal whichever is earlier. Revision disposed off.

Summary

Issues:
1. Whether the proceedings against the applicant were beyond the period of limitation as per section 29(6) of the U.P. Value Added Tax Act, 2008.
2. Whether a complete stay on the recovery should have been granted to the applicant during the appeal process.

Analysis:
Issue 1: The applicant contended that the proceedings against them were beyond the period of limitation as per section 29(6) of the Act. The Assessing Authority had raised a demand of Rs. 13,60,000 on 5.3.2018, which was later recalled on 30.9.2018. The applicant filed a First Appeal challenging the proceedings, arguing that they were ex-parte and beyond the limitation period. The Second Appellate Court granted a stay on 90% of the disputed amount. The Revision was filed as the applicant sought a complete stay on the recovery.

Issue 2: The learned counsel for the applicant argued that a complete stay on the recovery should have been granted during the appeal process. Citing relevant case laws, the applicant emphasized that no proceedings could continue against them as per section 29(6) of the Act. The learned Standing Counsel, however, argued that a 90% stay on the demand was sufficient to protect the applicant's interest. The Court, after hearing both parties, held that a complete stay on the recovery should have been granted during the First Appeal process. Consequently, the Court ordered that the disputed demand would remain stayed for four months or until the disposal of the First Appeal, whichever is earlier.

In conclusion, the High Court disposed of the Revision with the observation that the disputed demand would remain stayed during the First Appeal process. The judgment addressed the issues of limitation period under the Act and the necessity of a complete stay on recovery during the appeal proceedings, providing clarity on the legal aspects raised by the applicant.