M/S. Rare Aluminium Private Limited vs. The Assistant Commissioner (St) And 2 Others

Held

The Court held that the impugned order of the 2nd Respondent, dated March 16, 2020, rejecting the stay application, deserved to be set aside. The reasoning was that the 2nd Respondent had failed to consider the contentions raised by the petitioner in the stay application and the grounds of appeal. This failure was found to be contrary to the principles laid down by the High Court in its previous order concerning "Euphoric Imports and Exports, Hyderabad". The Court found the rejection order to be cryptic and lacking in reasons. Consequently, the Court set aside the order and remitted the matter back to the 2nd Respondent for fresh consideration. The 2nd Respondent was directed to pass a reasoned order after considering the petitioner's contentions and communicate it to the petitioner. The issue of the merits of the disallowance of input tax credit was expressly left undecided as the matter was remitted for a reasoned decision on the stay application.

Facts

M/s. RARE Aluminium Private Limited (Petitioner) filed a writ petition challenging the order of the Appellate Deputy Commissioner (ST) (2nd Respondent) dated March 16, 2020, which dismissed the petitioner's stay application. The stay application was filed in an appeal against an order dated August 13, 2019, passed by the Assistant Commissioner (ST) (1st Respondent). The dispute pertains to the disallowance of input tax credit, with a disputed tax amount of Rs. 73,23,906/- for the period April 2016 to June 2017 under the TS VAT Act, 2005. The petitioner contended that the 2nd Respondent's order rejecting the stay application was unreasoned and failed to consider the grounds of appeal. The revenue, represented by the Special Counsel for Commercial Taxes, was unable to justify the cryptic rejection order.

Key Issues

1. Whether the order passed by the Appellate Deputy Commissioner (ST) dismissing the petitioner's stay application is illegal, arbitrary, and violative of Articles 14 and 21 of the Constitution of India, and contrary to the law laid down by this Court? Petitioner's Arguments: The petitioner argued that the 2nd Respondent failed to assign any reasons for dismissing the stay application and did not consider the grounds of appeal. The petitioner relied on a previous order of the High Court in "Euphoric Imports and Exports, Hyderabad Vs. Commercial Tax Officer, N.S.Road Circle and others" (dated February 27, 2020), which deprecated the practice of authorities rejecting stay applications without assigning reasons. Revenue's Arguments: The Special Counsel for Commercial Taxes for the respondents was unable to explain why the 2nd Respondent issued a cryptic order rejecting the stay application without considering the contentions raised by the petitioner, despite the prior High Court ruling.