U.B.S. Exports International PVT. LTD. And Anr vs. State Of West Bengal And Ors.
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The appellants, U.B.S. Exports International Private Limited and another, filed an intra-court appeal against an order of the learned Single Bench that declined to grant an interim order and directed the filing of an affidavit-in-opposition in their writ petition. The writ petition challenged an order passed by the appellate authority, which had affirmed the adjudicating authority's order. The appellants contended that the GST tribunal was not yet constituted, and had it been functional, they would only be required to make a 20% pre-deposit to seek an interim order. They stated that the department had already recovered Rs. 86,39,418/-, which exceeded the 20% mandatory pre-deposit. The State counsel pointed out a false averment in the stay petition regarding the appellants' knowledge of statements made by Eastern Traders, of which the second appellant is a partner. The State also presented a tabulation of various writ petitions filed by the appellants.
Held
The Court held that the learned Single Bench correctly considered the facts and circumstances of the case and exercised its discretion by declining to grant an interim order. The Court found no grounds to interfere with the Single Bench's order. While acknowledging that a litigant approaching the tribunal is entitled to seek a stay subject to a 20% pre-deposit, the Court stated that it is not bound by such statutory principles when considering interim relief in a writ petition. The principles applicable to the tribunal can only have persuasive effect. The Court noted the alleged false averment made by the appellants regarding their knowledge of statements by Eastern Traders, of which the second appellant is a partner, and the presentation of a tabulation of various writ petitions by the State. The ratio decidendi is that a High Court, in its writ jurisdiction, is not strictly bound by statutory pre-deposit requirements applicable to tribunals, and its discretion in granting interim relief should not be interfered with unless there are compelling reasons. The appeal was dismissed, and the respondent authorities were directed to file their affidavit-in-opposition in the writ petition by June 14, 2024. The writ petition was to be listed before the appropriate Bench in the week commencing June 17, 2024.
Key Issues
1. Whether the learned Single Bench erred in declining to grant an interim order in the writ petition, considering the non-constitution of the GST tribunal and the recovery of an amount exceeding the mandatory pre-deposit required for an appeal to the tribunal. Petitioner/Appellant's Contention: The appellants argued that the writ petition was filed due to the non-functional GST tribunal. They contended that if the tribunal were functional, a 20% pre-deposit would suffice for an interim order, and since more than this amount had already been recovered, the court should have granted interim relief. They relied on the principle of mandatory pre-deposit under the statute for appeals to the tribunal. Revenue/State's Contention: The State counsel argued that the appellants had made a false averment in their stay petition regarding their knowledge of statements made by Eastern Traders, as the second appellant is a partner in that firm. They also presented a tabulation of multiple writ petitions filed by the appellants, suggesting a pattern of litigation. The State did not explicitly address the pre-deposit issue but focused on the alleged false averments and the court's discretion.
AI-generated summary — verify with the full judgment below
2024 Item No.6 gd/s MAT/798/2024 IA NO: CAN/1/2024 directing affidavit-in-opposition to be filed in the writ petition.
The said writ petition was filed challenging an order passed by the appellate authority which affirmed the order passed by the adjudicating authority.
The contention of the learned advocate appearing for the appellants is that the writ petition was filed before the learned Single Bench on the ground that the GST tribunal has yet to be constituted and had the appellants filed an appeal before the tribunal all that is required was a 20% mandatory pre-deposit and the appellants would be entitled to grant an interim order from further recovery.
2
It is a submission that as on date the department has recovered a sum of Rs.86,39,418/- which is far more than 20% mandatory pre-deposit required to be made if an appeal is preferred to the tribunal.
It may be true that under the statute the aggrieved person who approaches the tribunal would be entitled to make a prayer for stay subject to payment of 20% of the disputed tax.
In the instant case, it appears to be not in dispute that more than 20% has been recovered, nonetheless the writ petition has been filed before this court and that has been entertained on the ground that the tribunal is not functional.
While considering the prayer for interim order, the court is not bound by the statutory principle which would be made applicable to the tribunal.
In the event an appeal is filed to the tribunal and such principle can at best have a persuasive effect for the court to consider as to the nature of interim order that has to be passed in a pending disposal of the writ petition.
The learned Government counsel pointed out that the false averment has been made in the stay petition in this appeal wherein in paragraph 17 it has been stated that the appellants do not have knowledge about what was written by Eastern Traders.
3
In the facts and circumstances of this case, the appellants could not have taken such a stand more particularly because the 2nd appellant, Uttam Kumar Bagaria is one of the partners of the partnership firm/ Eastern Traders.
The learned Government counsel has also produced a tabulated format given details of the various writ petitions which have been filed both by the first appellant company, the partnership firm and the individual partner/Directors, therefore, this averment appears to be a false averment.
In any event, we are of the view that the court considered the facts and circumstances and declined to exercise any discretion in granting an interim order and we find that no grounds have been made to interfere with the said order passed by the learned Single Bench.
Accordingly, the appeal is dismissed.
The respondent authorities are directed to file their affidavit-in-opposition in the writ petition not later than 14th June, 2024. 15. Let the writ petition be listed before the appropriate Bench in the week commencing 17th June, 2024. (T. S. SIVAGNANAM)
CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.