No Interference Required In VAT Tribunal’s Order For Pre-Deposit If Backed By Due Reasons: Kerala HC While Granting Instalment Facility To Taxpayer
The Kerala High Court has recently allowed the petitioner (Pyramid Architects and Engineers) to pay the outstanding tax demanded by the assessing authority in instalments.
The Division Bench of Justice A. Muhamed Mustaque and Justice Shoba Annamma Eapen observed that “we do not find any reason to interfere with Ext.P6 order. Sufficient reasons have been stated by the Appellate Tribunal while passing Ext.P6 order. However, we feel that the petitioner can be given instalment facility to pay off the amount now demanded as per Ext.P6”.
Advocate S. Anil Kumar appeared for the Petitioner, whereas Advocate P.R Sreejith appeared for the Respondent.
As per the brief facts of the case, the petitioner had challenged a conditional order issued by the Kerala Value Added Tax Appellate Tribunal in Kozhikode, which directed the petitioner to deposit 10% of the outstanding tax for the years 2014-15 and 2015-16 and furnish a simple bond for the remaining amount to the satisfaction of the assessing authority within one month from the date of receiving the order.
The petitioner argued that the conditional order imposed by the tribunal was onerous, and the petitioner lacked the financial means to fulfil it. It was also pointed out that when filing their initial appeals, they had already deposited 20% of the demanded amount. Therefore, they requested that the newly imposed condition be set aside.
On the contrary, the counsel for the Department argued that since the petitioner had lost the case in the first appeal, the Appellate Tribunal's decision to require the petitioner to pay only 10% of the outstanding tax demanded was reasonable.
After considering the submission, the Bench observed that there was no justification for intervening in the order, since the Appellate Tribunal had provided sufficient rationale for issuing the conditional order.
However, the Bench pointed that the petitioner should be granted the option to pay the outstanding tax in instalments.
Accordingly, the High Court directed the petitioner to remit the amount demanded as per the conditional order in three equated monthly instalments.
The High Court also emphasized that all coercive proceedings against the taxpayer would be kept in abeyance in order to enable the taxpayer to repay the amount as directed.
Cause Title: Pyramid Architects and Engineers v. State Tax Officer, Works Contract, State GST Department, Palakkad and Ors. [Neutral Citation: 2023: KER: 53932]
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