M/S.Ramnath Traders vs The Secretary
2021 Latest Caselaw 6492 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

          THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR

                                   &

                 THE HONOURABLE MR. JUSTICE GOPINATH P.

   TUESDAY, THE 23RD DAY OF FEBRUARY 2021 / 4TH PHALGUNA, 1942

                         OP (TAX).No.7 OF 2021

 AGAINST THE ORDER IN INTP 293/2020 IN TA(VAT) 208/2020 DATED 28-
         12-2020 OF AGRL.I.T.ADDITIONAL BENCH,KOZHIKODE


PETITIONER/APPELLANT:

               M/S.RAMNATH TRADERS
               UPPALA, KASARAGOD, REPRESENTED BY AUTHORIZED
               SIGNATORY, MR.PRABHAKAR SHENOY.M., S/O.SHENOY, AGED
               65 YEARS.

               BY ADV. SRI.C.K.SREEJITH

RESPONDENTS/RESPONDENTS:

      1        THE SECRETARY, KERALA VALUE ADDED TAX/
               AGRL. INCOME TAX AND SALES TAX APPELLATE TRIBUNAL,
               ADDITIONAL BENCH, KOZHIKODE-673 032.

      2        THE DEPUTY COMMISSIONER (APPEALS) II,
               DEPARTMENT OF COMMERCIAL TAXES, CALICUT-673 006.

      3        THE ASSISTANT COMMISSIONER OF STATE TAX,
               STATE GOODS AND SERVICE TAX DEPARTMENT,
               KASARAGOD-671 121.


OTHER PRESENT:

               GOVERNMENT PLEADER SRI.SHAMSUDHEEN V.K

  THIS OP TAX HAVING COME UP FOR ADMISSION ON 23.02.2021, THE
  COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 O.P.(TAx)No.7/2021                       2




                                    JUDGMENT

A.K. Jayasankaran Nambiar, J

This O.P.(Tax) is preferred against Ext.P6 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 O.P.(Tax), the contention urged on behalf of the petitioner

is essential that, while the Appellate Tribunal has already found in

favour of the petitioner as regards existence of a prima facie an

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.

2. We have heard the learned counsel appearing for the

petitioner as also the learned Government Pleader appearing for the

respondents.

3. 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 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.P6 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 appeal. The Tribunal shall pass fresh orders as directed, within a

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

sd/-

A.K.JAYASANKARAN NAMBIAR JUDGE

sd/-

GOPINATH P.

JUDGE Acd

APPENDIX PETITIONER'S/S EXHIBITS:

EXHIBIT P1 THE TRUE COPY OF THE ORDER DATED 27.04.2019 ISSUED BY THE 3RD RESPONDENT.

EXHIBIT P2 THE TRUE COPY OF THE APPELLATE ORDER PASSED IN VATA-517/19.

EXHIBIT P3 THE TRUE COPY OF THE MODIFIED ORDER DATED 15.09.2020 ISSUED BY THE 3RD RESPONDENT.

EXHIBIT P4 THE TRUE COPY OF THE 2ND APPEAL FILED BEFORE THE TRIBUNAL.

EXHIBIT P5 THE TRUE COPY OF THE STAY PETITION FILED BEFORE THE 1ST RESPONDENT TRIBUNAL IN 2ND APPEAL.

EXHIBIT P6 THE TRUE COPY OF THE ORDER PASSED IN IN TP 293/20 IN TA(VAT) 208/20 ON THE FILE OF KERALA VALUE ADDED TAX/AGRL.

INCOME TAX AND SALES TAX APPELLATE TRIBUNAL, ADDITIONAL BENCH, KOZHIKODE DATED 28.12.2020.