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M/s Bharat Sanchar Nigam Ltd. Versus Commissioner of Commercial Tax

2016 (7) TMI 716 - ALLAHABAD HIGH COURT

Waiver of pre-deposit - tribunal declined a complete stay on the disputed tax-liability - Held that:- Financial condition/hardship is an important consideration but then the businessmen, dealer etc. has to place relevant material in this regard showing dire financial condition. Income-tax Return are relevant material in this regard. - Thus, the discretion vested in the learned Tribunal and First Appellate Authority in matters of interim relief under a Taxing Statute such as the one under conside .....

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67 of 2016 - Dated:- 11-7-2016 - Hon'ble Rajan Roy, J. For the Applicant : Pradeeo Agrawal For the Opposite Party : C.S.C ORDER Trade Tax Revision No. 67 of 2016 has been filed under Section 58 of the VAT Act, 2008 against the judgment and order dated 04.05.2016 passed by the learned Commercial Tax Tribunal, Lucknow in Appeal No. 141 of 2016. The question of law involved in this revision is as under:- Whether the impugned judgment of the tribunal can be sustained in the light of the paramet .....

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heir mind to the relevant parameters while considering the application for interim relief and have declined a complete stay on the disputed tax-liability mechanically. Learned counsel for the revisionist relied upon the following judicial pronouncements in support of his contention:- (1) Indian Oil Corportion Ltd. vs. Trade Tax Tribunal; 1999 UPTC 1030 para 4 (2) Tata Coffee Ltd. Vs. Commissioner of Trade Tax; 2002 UPTC 156 para 3 (3) I.T.C. Ltd. vs. Commissioner (Appeals) Custom & Central E .....

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m Ltd. Vs. CCT; T.T.R. No. 33 of 2014 decided on 09.04.2014. Sri Sanjeev Shankhyadhar learned counsel appearing on behalf of the Tax-department relied upon the decision of the Supreme Court in the case of Assistant Collelctor v. Dunlop India Ltd. & ors reported in (1985) 1 SCC 260 and asserted that the said pronouncement has not been adhered to. The parameters which are required to be considered while deciding an application for interim relief, have been settled by the Supreme Court in a cat .....

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der various taxing statutes woke up to the constitutional and statutory obligations imposed upon them to follow the principles of law enunciated by the Supreme Court and by this Court while considering an application for stay of disputed tax liability. Under VAT Tax Act, 2008 an appeal is provided against an order passed by the Assessing Authority which is referred to as the First Appellate Authority. Under sub section 3 of Section 55 of the VAT Act, 2008 there is a requirement of pre-deposit of .....

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force after thirty days from the date on which the same has been granted, if the appellant does not furnish security to the satisfaction of the assessing authority for payment of the amount, the realization whereof has been stayed within the aforesaid period of thirty days; (ii) no such application shall be entertained unless it is filed along with the memorandum of appeal under sub-section (1). Against the order of the First Appellate Authority there is a provision for filing an appeal before t .....

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y of being heard subject to the conditions mentioned in the provisos to the said Section. There is also a requirement under proviso (a) of sub section 9 of Section 57 of pre-deposit of not less than one third of such disputed amount in addition to the amount required to be deposited under sub-section 3 of Section 55. Sub-section 10 thereof further stipulates that no such stay order which relates to stay of recovery of any tax, fee or penalty by the learned Tribunal shall remain in force for more .....

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inessman shall furnish security in respect of the stayed amount within thirty days to the satisfaction of the assessing authority. The said order reads as under:- " उपरोक्त मामले में विवादग्रस्त कर रु० ४,९८,०२,३५२.८८ का है1 & .....

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2341;ा कर निर्धारक अधिकारी के समक्ष सुनवाई की गई1 अपीलकर्ता की तरफ से बताया गया कि बिना किस& .....

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;ी मांग की गई1 विभाग की तरफ से स्थगन का विरोध किया गया1 विद्वान अधिवक्ता के तर्कों पर विच .....

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67;शत) अपील के निस्तारण तक स्थगित रखने के आदेश दिए जाते हैं. व्यापारी आदेश के दिनांक से ती&# .....

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2368; स्थित में उक्त आदेश स्वतः निरस्त समझा जायेगा1 " On a bare perusal of the interim order passed as aforesaid, a complete disregard and non application of mind to the parameters laid down by the Supreme Court and this Court in various decisions is writ large. Merely say .....

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factors, thereby, committing the same mistake which was committed by the First Appellate Authority. For convenience the order of the learned Tribunal passed on the same day i.e. 04.05.2016 is reproduced as under: निर्णय "विचाराधीन अपीलें एडिशनल कमिश्नर ग्रेड-&# .....

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2;िनांक २८.०४.२०१६ के विरुद्ध प्रस्तुत क़ी गई है, जिसके द्वारा प्रथम अपीलीय अधिकारी ने वì .....

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68; प्रथम अपीलों के निर्णय तक स्थगित रहने का आदेश पारित किया है1 अपीलकर्ता की तरफ से श्री &# .....

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7;त बिंदुओं को दोहराते हुए तर्क किया गया कि फर्म केंद्रीय सरकार का एक प्रतिष्ठान है. यह  .....

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;र्य किया जाता है जिसके लिए टावर निर्माण का कार्य ठेकेदारों से वर्क कॉन्ट्रैक्ट पर कर& .....

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361;ै1 यह भी बताया गया कि फर्म द्वारा फार्म -२६ एवं अन्य व्यापारिक विवरण पूर्व में दाखिल कि& .....

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0;रोपित कर दिए गए है जो उचित नहीं है. अपीलकर्ता फर्म द्वारा शपथ पत्र दाखिल किये गए है. अंत & .....

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#2352; से श्री गिरीश चन्द्र असिस्टेंट कमिश्नर एवं राज्य प्रतिनिधि उपस्थित हुए. अपीलकर्तì .....

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;न आदेशों, द्वितीय अपील आधारों, शपथ पत्रों और अपीलों की सुनवाई के समय विद्वान अधिवक्ता .....

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2360;म्बन्ध में गुण दोष के आधार पर विचार प्रथम अपीलों के निस्तारण के समय किया जाना है. मानन& .....

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350; कमिश्नर ऑफ़ कमर्शियल टैक्स एंड अदर्स (वी.एस.टी.आई. २०१२, वॉल्यूम १४ पृष्ठ बी.-६७५ एवं मानê .....

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; अदर्स (वी.एस.टी.आई. २००९ बी.-२४९) के वादों में दिए गए निर्णयों में प्रतिपादित सिद्धांत तथ& .....

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51;ान में रखते हुए प्रथम अपीलों के निर्णय तक अपीलकर्ता द्वारा कर निर्धारण अधिकारी के सम .....

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2409;६,७९,८७३/- व रु. ७५,३७,३४८/- के ८५-८५ प्रतिशत भाग का स्थगन किया जाना न्याय संगत एवं न्यायोचि& .....

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07;४१/२०१६, १४२/२०१६ व १४३/१६ आंशिक रूप से स्वीकार की जाती है तथा विवादित धनराशिओं क्रमशः &# .....

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6;ीलों के निस्तारण तक इस प्रतिबन्ध के साथ स्थगित की जाती है की अपीलकर्ता स्थगित धनराशि .....

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2342;िन के अंदर प्रस्तुत करेंगे. उपरोक्त प्रतिभूति प्रस्तुत न करने की दशा में पारित यह आद .....

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्रतिलिपि सम्बंधित पत्रवलिओं में रखी जाए1" A bare perusal of the order passed by the learned Tribunal shows that it has merely made a cryptic observation that it has heard the parties and perused the impugned interim order passed by the First Appellate Authority, grounds of the second appeal .....

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s it appropriate and justified to stay the realization of the disputed tax-liability to the extent of 85%, and merely on the basis of this cryptic recital it has passed the order accepting the appeal partly, thereby impliedly setting aside the impugned order passed by the First Appellate Authority. Such cryptic recitals both by the First Appellate Authority and the learned Tribunal do not satisfy the requirement of law. The passing of such orders in such a manner are hereby deprecated. For the c .....

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oration of Delhi reported in (1993) 3 SCC 161. This was a judgment rendered by a Bench of three Hon'ble Judges, wherein, in paragraph 30 their Lordships observed as under:- ".....[A] party is not entitled to an order of injunction as a matter of right or course. Grant of injunction is within the discretion of the court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is restrained by an orde .....

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and refusal of injunction would cause irreparable injury to him." In the case of Dalpat Kumar v. Prahlad Singh reported in (1992) 1 SCC 719, a Bench of two Hon'ble Judges observed in paragraph 6 as under:- "...... "prima facie case", "balance of convenience" and "irreparable loss" are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by men's ingenuity in given facts and circumstances, but .....

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ation and another, reported in (1995) 3 SCC 33, wherein it observed that in Dalpat Kumar (supra) the Supreme Court held that the phrases "prima facie case", "balance of convenience" and "irreparable loss" are not rhetoric phrases for incantation but words of width and elasticity intended to meet myriad situation presented by men's ingenuity in given facts and circumstances and should always be hedged with sound exercise of judicial discretion to meet the ends of .....

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ction. The concept of "irreparable injury" was considered in Dalpat Kumar (supra) the Supreme Court opined that it does not mean that there must be no physical possibility of repairing the injury but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. While considering the concept of "balance of convenience" which is required to be in favour of granting injunction, the court opined that while granting or refus .....

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nction would be issued. Thus, it opined that a court has to exercise its sound judicial discretion in granting or refusing the relief of ad-interim injunction pending the suit. The aforesaid observations were made in the context of refusal or grant of temporary injunction in a suit under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure, 1908 but the principles enunciated therein have been applied to matters relating to grant or refuse to grant interim relief in proceedings other than suit .....

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Ltd. v. S. Samuel and others reported in (1985) 2 SCR 24, Titagarh Paper Mills Co. Ltd. v. State of Orissa reported in (19983) 2 SCC 433, Union of India v. Oswal Woolen Mills Ltd. reported in (1984) 2 SCC 646 and Siliguri Municipality vs. Amlendu Das reported in (1981) 2 SCC 436. In the case of Siliguri Municipality (supra) the Calcutta High court had passed orders restraining the Siliguri Municipality from recovering a graduated consolidated rate on the annual value of buildings in terms of th .....

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pal relief sought in the petition for no better reason than that a prima facie case has been made out without being concerned about 'balance of convenience', the 'public interest' and a host of other relevant considerations. The court further observed that there are of-course cases which demand that interim orders should be made in the interests of justice. Where gross violations of the law and injustices are perpetrated or are about to be perpetrated, it is the bounden duty of t .....

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far reaching dimensions or orders causing administrative, burdensome inconvenience or orders preventing collection of public revenue for no better reason than that the parties have come to the court alleging prejudice, inconvenience or harm and that a prima facie case has been shown. There can be and there are no hard and fast rules. But prudence, discretion and circumspection are called for. There are several other vital considerations apart from the existence of a prima facie case. There is t .....

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e after considering the pros and cons of the matter lest larger public interest is not jeopardized and institutional embarrassment is eschewed". The court further went on to observe as under:- "Even assuming that the company had established a prima facie case, about which we do not express any opinion, we do not think that it was sufficient justification for granting the interim orders as was done by High Court. There was no question of any balance of convenience being in favour of the .....

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re concerned, it is of utmost importance to realise that interim orders ought not to be granted merely because prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest". In Benara Valves Ltd (supra) which was a case arising out of Central Excise Act, 1944 specially relating to Section 35-F thereof again the ques .....

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t be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Thus, the Supreme Court clarified the matter regarding prima-facie case, thus in a given case if the issue involved has already been adjudicated then it would be a very strong prima facie case in favour of the assessee and subjecting the assessee to tax-liability even in such cases would fall within the a .....

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quiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved." It also observed in paragraph 9 of the judgment that "it has become an unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri Municipality and Dunlop India cases without analysing factual scenario involved in a particular case. In nut shell the Su .....

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anner is highly objectionable. In Benara Valves Ltd. (supra) though, the Supreme Court was considering the language used in Section 35-F of the Central Excise Act wherein the word 'undue hardship to such person' and 'safeguard the interests of the Revenue' had been used but the observations made by it regarding 'undue hardship' should be kept in mind in other tax matters also. It opined that in Indian condition the expression 'undue hardship' is normally related t .....

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e interest of Revenue is also required to be taken into consideration. Financial condition/hardship is an important consideration but then the businessmen, dealer etc. has to place relevant material in this regard showing dire financial condition. Income-tax Return are relevant material in this regard. Thus, the discretion vested in the learned Tribunal and First Appellate Authority in matters of interim relief under a Taxing Statute such as the one under consideration is to be exercised judicia .....

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