K.T.Manoj Kumar vs. The State Tax Officer - Kerala High Court, 07 January 2022

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P. FRIDAY, THE 7TH DAY OF JANUARY 2022 / 17TH POUSHA, 1943 OP (TAX) NO. 2 OF 2022 AGAINST THE ORDER INTP 132/2021 IN TA (VAT) 97/2021 OF THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, KOZHIKODE DATED 27.10.2021. PETITIONER/APPELLANT/APPELLANT/ASSESSEE: K.T.MANOJKUMAR AGED 55 YEARS,PROPRIETOR M/S GAYATHRI GRAND, OPP.GOVERNMENT HOSPITAL CHERPULASSERY, PALAKKAD. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS/RESPONDENTS/RESPONDENTS/REVENUE: 1 THE STATE TAX OFFICER WORKS CONTRACT STATE GOODS AND SERVICES TAX DEPARTMENT PALAKKAD-678001 2 THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, CHEROOTTY ROAD, KOZHIKODE-673 032. REPRESENTED BY ITS ASST.SECETARY BY SR GOVT. PLEADER SRI.V.K SHAMSUDHEEN THIS OP TAX HAVING COME UP FOR ADMISSION ON 07.01.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: :2: OP(Tax).No.2 of 2022

JUDGMENT A.K.Jayasankaran Nambiar, J.

This O.P.(Tax) is preferred against Ext.P4 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 essentially 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.

We have heard the learned counsel appearing for the petitioner as also the learned Government Pleader appearing for the respondents.

On a consideration of the facts and circumstances of the case,

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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.P4 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 :4:

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. A.K.JAYASANKARAN NAMBIAR JUDGE MOHAMMED NIAS C.P. JUDGE mns

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APPENDIX PETITIONERS EXHIBITS: EXT.P1 :COPY OF ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2011-12 DATED 26.04.2019 EXT.P2 :COPY OF APPELLATE ORDER OF THE JOINT COMMISSIONER (APPEALS) KOZHIKODE DATED 15.03.2021 EXT.P3:COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 14.07.2021 EXT.P3(A):COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 14.07.2021 EXT.P4:COPY OF ORDER IN INTP 132/21 TA(VAT)NO.97/21 ISSUED BY THE 2ND RESPONDENT DATED 27.10.2021 RESPONDENTS EXHIBITS:NIL //// P.A TO JUDGE