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TMI Blog2020 (3) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... to the learned first appellate authority for hearing on merits without insisting for any pre-deposit or security for admission and stay against recovery of dues; B. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to restrain the learned Respondent authorities from making coercive recovery pursuant to the assessment order passed for the year 201314; C. Ex parte ad interim relief in terms of prayer B may kindly be granted; D. Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray." 3. The subject matter of challenge is the order passed by the Gujarat Value Added Tax Tribunal dismissing the Second Appeal No.885 of 2018 preferred by the writ-applicant herein against the order passed by the Dy. Commissioner, State Tax, Appeal-5, Vadodara, as the First Appellate Authority. The controversy revolves around the failure on the part of the writ-applicant in making the pre-deposit. The order passed by the Tribunal in the Second Appeal No.882 of 2018 directing the writ-applicant to make a pre-deposit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gas. It is a foreign company within the meaning of Section 592 of the Companies Act, 1956. The writ-applicant has been duly registered under the Gujarat Value Added Tax Act, 2003(for short "the VAT Act"), as well as the Central Sales Tax Act, 1956 (for short "the Act"). 7. The Government of India entered into a Production Sharing Contract jointly with the Gujarat State Petroleum Corporation Ltd. and the writ-applicant herein for the exploration and development of the Hazira field. The GSPC is a Government undertaking. The Government of Gujarat has a 90% shareholding in the GSPC. 8. It also appears that the writ-applicant herein entered into an agreement with the GSPC. Such agreement was in the form of a Joint Operating Agreement. The participating interest of the writ-applicant came to be fixed at 33.33 %, whereas the interest of the GSPC was fixed at 66.67 %. 9. It is the case of the writ-applicant that the GSPC used to receive the total consideration of the sales made from the Hazira block, and the tax liability under the Act, 1969, as well as the VAT Act, used to be discharged by the GSPC on the total sale consideration. The writ-applicant used to periodically receive the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an order of assessment shall ordinarily be entertained by an appellate authority, unless such appeal is accompanied by satisfactory proof of payment of the tax in respect of which an appeal has been preferred: [Provided that an appellate authority may, if it thinks fit, for reasons to be recorded in writing, entertain an appeal against such order- (a) Without payment of tax with penalty (if any) or, as the case may be, of the penalty, or (b) On proof of payment of such smaller sum as it may consider reasonable, or (c) On the appellant furnishing in the prescribed manner, security for such amount as the appellate authority may direct.]" 15. The aforesaid provision would make it clear that no appeal against an order of assessment shall ordinarily be entertained by an Appellate Authority if such an appeal is not accompanied by satisfactory proof of the payment of tax in respect of which an appeal is preferred. However, the proviso to clause 4 makes the picture further clear. It confers discretion upon the Appellate Authority in appropriate cases to entertain the appeal without the payment of tax with penalty or in an appropriate cases on proof of the payment of the smaller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged the demand raised in the first petition No.2157 of 2018 in the sum of Rs. 11,15,99,897/- for Assessment Year 2015-2016 by approaching the Commissioner of Income Tax (Appeals). Thus, an Appeal against the Assessment Order raising this demand is filed and is pending. 3. In the meanwhile, the petitioner approached the Assessing Officer/Deputy Commissioner of Income Tax, Circle 15(1) (1), Aayakar Bhavan, Mumbai. He may have made an application and termed it as a request for stay, but what essentially he was worried and concerned about was that since the Appeal is pending and yet to be decided, nor was there any consideration of application for stay by Appellate Authority, this Deputy Commissioner will treat the petitioner/assessee as 'assessee in default'. Thereupon, he will recover the amount by coercive means. It is in these circumstances, this letter was addressed and we have carefully perused that letter. That records that the subject matter of tax is in dispute. The Assessment Order is challenged. The Appeal under Section 246-A of the Income Tax Act 1961 challenging the Assessment Order dated 30th December 2017, received on 1st August 2018 is pending. The request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitions with directions that the Appellate Authority shall conclude the hearing of the Appeals as expeditiously as possible and during pendency of these Appeals, the petitioner/appellant shall not be called upon to make payment of any sum, much less to the extent of 20% under the Assessment Order/Confirmed Demand or claim to be outstanding by the Revenue." 19. The issue of granting stay pending appeal is governed principally by the two circulars issued by the CBDT. The first circular was issued way back on 2nd February 1993 being instructions no.1914. The circular contained guidelines for staying the demand pending appeal. It was stated that the demand would be stayed if there are valid reasons for doing so and mere filing of appeal against the order of assessment would not be sufficient reason to stay the recovery of demand. The instructions issued under the office memorandum dated 29th February 2016 are not in supersession of the instructions no.1914 dated 2nd February 1993 but are in partial modification thereof. The preamble of these instructions provide that in order to streamline the process of grant of stay of standardization of quantum of lump-sum payment to be made as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r para 4 A(c) above, the same shall also be disposed of by the Pr. CIT/CIT within 2 weeks of the assessing officer making such reference or the assessee filing such review, as the case may be. (E) In granting stay, the Assessing Officer may impose such conditions as he may think fit. He may, inter alia - (i) require an undertaking from the assessee that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled; (ii) reserve the right to review the order passed after expiry of reasonable period (say 6 months) or if the assessee has not co-operated in the early disposal of appeal, or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; (iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of section 245." 20. This circular thus lays down 15% of the disputed demand to be deposited for stay, by way of a general condition. The circular does not prohibit or envisage that there can be no deviation from this standard formula. In other words, it is inbuilt in the circular itself to eit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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