Firdous Gold Chemmad (Pvt) Ltd vs State Tax Officer
2021 Latest Caselaw 11145 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

           THE HONOURABLE MR.JUSTICE A.K.JAYASANKARAN NAMBIAR
                                    &
                  THE HONOURABLE MR.JUSTICE GOPINATH P.

      WEDNESDAY, THE 07TH DAY OF APRIL 2021/17TH CHAITHRA, 1943

                           W.A.No.451 OF 2021

    AGAINST THE JUDGMENT DATED 19.2.2021 IN W.P(C).NO.3789/2021(W)
                       OF HIGH COURT OF KERALA


APPELLANT/PETITIONER:

              FIRDOUS GOLD CHEMMAD (PVT) LTD.,
              CHEMMAD, MALAPPURAM, PIN-676306, REPRESENTED BY ITS
              MANAGING DIRECTOR P.P.MUHAMMEDDALI.

              BY ADVS.SMT.M.K.HAJARA
                      SRI.C.RAMACHANDRAN

RESPONDENTS/RESPONDENTS:

       1      STATE TAX OFFICER,
              STATE GOODS AND SERVICE TAXES, TIRURANGADI -676306.

       2      ASSISTANT COMMISSIONER,
              STATE GOODS AND SERVICE TAX DEPARTMENT,
              MINI CIVIL STATION, MANCHERY, MALAPPURAM-676121.

       3      APPELLATE TRIBUNAL,
              ADDITIONAL BENCH, KOZHIKODE-673020.

              BY SRI.SHAMSUDHEEN V.K., GOVT. PLEADER

         THIS WRIT APPEAL     HAVING COME UP FOR ADMISSION ON
    07.04.2021, THE COURT      ON THE SAME DAY DELIVERED THE
    FOLLOWING:
 W.A.No.451/2021                :: 2 ::




                        JUDGMENT

A.K. Jayasankaran Nambiar, J.

The petitioner in W.P.(C).No.3789/2021 is the appellant

before us, aggrieved by the judgment of the learned Single

Judge in the writ petition. The brief facts necessary for a

disposal of the writ appeal are as follows:

2. The writ petition was filed against Ext.P3 order of the

Kerala Value Added Tax Appellate Tribunal, whereby, while

considering a stay application filed along with the Second

Appeal, the Appellate Tribunal directed the petitioner to deposit

30% of the modified demand and furnish a simple bond as a

condition for the stay against the recovery of the balance

amount of tax demanded from him, pending disposal of the

appeal. In the Writ Petition, the contention urged on behalf of

the petitioner is essentially that, while the Appellate Tribunal W.A.No.451/2021 :: 3 ::

has already found in favour of the petitioner as regards

existence of a prima facie and arguable case in the appeal and

also that, if recovery proceedings continued during the

pendency of the appeal, the petitioner will be put to irreparable

loss and hardship, it still went on to direct the petitioner to

deposit 30% of the modified demand and furnish a simple bond

so as to protect the interest of his revenue. The learned Single

Judge, however, dismissed the writ petition by granting the

petitioner an opportunity to approach the Tribunal with a

request for early hearing of the appeal.

3. We have heard the learned counsel appearing for the

petitioner as also the learned Government Pleader appearing for

the respondents.

4. On a consideration of the facts and circumstances of

the case, we are of the view that at the time of considering a

stay application, the Appellate Authority was required to

consider whether the appellant, before it, had established a

prima facie case on the merits of the case, and if so, whether the

grant of stay of recovery ought to be conditional or W.A.No.451/2021 :: 4 ::

unconditional depending upon the financial position of the

appellant. In the instant case, while the Appellate Tribunal found

that the petitioner had made out a prima facie and arguable case

in the appeal which necessitated the grant of stay against

recovery, pending disposal of the appeal, it also went on to hold

that requiring the petitioner to deposit any amount would result

in irreparable loss and hardship to him. While we cannot

ascertain the factual basis for the latter finding of the Appellate

Tribunal, we are of the view that the subsequent finding of the

Tribunal as regards the irreparable loss and hardship that would

result to the petitioner effectively prevented it from requiring

the petitioner to deposit any amount as a condition for the grant

of the stay of recovery of the balance amount, pending disposal

of the appeal. We, therefore, quash Ext.P3 order and relegate

this matter to the Appellate Tribunal to consider the stay

application afresh, after perusing the material produced by the

petitioner to establish his financial position and then take a fresh

decision as to whether the petitioner is required to make any

deposit to safeguard the interest of the revenue or whether the

financial position of the petitioner is such as would necessitate

the grant of an unconditional stay, pending disposal of the W.A.No.451/2021 :: 5 ::

appeal. The Tribunal shall pass fresh orders, as directed, within

a month from the date of receipt of a copy of this judgment.

The Writ Appeal is disposed as above.

Sd/-

A.K.JAYASANKARAN NAMBIAR JUDGE

Sd/-

GOPINATH P.

JUDGE

prp/8/4/21