M/S.Nakshathra Jewellers vs. The State Tax Officer-1, SGST Department

Facts

The petitioner, M/s. Nakshathra Jewellers, approached the High Court of Kerala challenging an order of conditional stay passed by the Kerala Value Added Tax Appellate Tribunal (3rd respondent). The Tribunal's order directed the petitioner to deposit 20% of the demanded amount and furnish security for the balance. The petitioner contended that they had already deposited 20% while filing their first appeal. The State Tax Officer-1 (1st respondent) and Assistant Commissioner (Appeals) (2nd respondent) were also parties. The Government Pleader noted that the payment appeared to be towards penalty proceedings, which had been modified.

Held

The Court did not find any reason to interfere with the conditional stay order passed by the Tribunal. While acknowledging the petitioner's submission about having already deposited 20%, the Court took note of the nature of the impugned order and the fact that the payment was towards penalty proceedings which had been modified. The Court, however, granted the petitioner four installments to comply with the Tribunal's directions, commencing from March 28, 2019. The Court stipulated that if the petitioner defaulted on any installment, the respondent would be free to proceed against them. Coercive steps against the petitioner were deferred in accordance with these installment directions. No specific provision of law was directly discussed or interpreted as the Court disposed of the writ petition on the procedural aspect of compliance and deferment of coercive steps.

Key Issues

1. Whether the conditional stay order passed by the Tribunal, requiring a deposit of 20% of the demanded amount and security for the balance, is sustainable in law, considering the petitioner had already deposited 20% during the first appeal stage. Petitioner's Argument: The petitioner argued that they had already complied with the 20% deposit requirement when filing their first appeal, implying the Tribunal's order was either redundant or unduly burdensome. Revenue's Argument: The Government Pleader pointed out that the payment seemed to be towards penalty proceedings, and that the order in those penalty proceedings had been modified. This suggests the revenue's stance was that the Tribunal's order was justified in light of the ongoing penalty proceedings and their modification.