SOBHA LTD. (FORMERLY SOBHA DEVELOPERS LTD.) vs. THE ASST. COMMISSIONER (WORKS CONTRACT)

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OP (TAX)/5/2019HC KeralaKLHC01048394201916 July 2019Bench: HONOURABLE MR.JUSTICE C.K.ABDUL REHIM,HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI5 pages
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What did the High Court hold?

The High Court, while acknowledging that the impugned interim order did not reflect a prima facie appreciation of the merits of the appeal, opted not to remit the matter for fresh consideration. Instead, the Court decided to dispose of the Original Petition by modifying the Tribunal's order as an equitable relief. The Court directed the petitioner to deposit 20% of the disputed amount pending the appeal, instead of the 30% stipulated by the Tribunal. Additionally, the petitioner was directed to execute a simple bond for the balance amount within 30 days. The Tribunal was also directed to dispose of the appeal at the earliest possible opportunity, provided the deposit was made. The Court did not decide on the merits of the appeal itself, focusing solely on modifying the interim relief.

What were the facts?

The petitioner, Sobha Ltd., is challenging an interim order (Ext.P5) passed by the Kerala Value Added Tax Appellate Tribunal. The order was in relation to an appeal (T.A.(VAT) No.394/18) concerning assessment for the year 2013-14. The petitioner had appealed against the assessment order to the first appellate authority and then to the Tribunal. While the appeal was pending before the Tribunal, the petitioner filed an interim application seeking a stay on the realization of disputed amounts. The Tribunal, noting that no payment had been made, directed the petitioner to pay 30% of the total demand and execute a bond for the balance amount to grant the interim stay.

What were the issues?

1. Whether the Tribunal's interim order, directing payment of 30% of the disputed demand and execution of a bond for the balance, was passed mechanically without proper application of mind to the merits of the appeal, solely based on the fact that no payment was made. Assessee's Contentions: The petitioner argued that the Tribunal's order was passed mechanically without considering the grounds of appeal and the merits. They contended that insisting on payment merely because no payment was made previously is not a legally sound approach for imposing conditions for an interim stay. Revenue's Contentions: The revenue did not record any specific contentions in the judgment regarding the interim order. The learned Government Pleader appeared for the respondents.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI TUESDAY, THE 16TH DAY OF JULY 2019 / 25TH ASHADHA, 1941 OP (TAX).No.5 of 2019 (AGAINST THE ORDER OF THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL, ADDL.BENCH, THIRUVANANTHAPURAM IN IP NO.547/18 IN T.A. (VAT) NO.394/18 DATED 13.06.2019) PETITIONER: SOBHA LTD. (FORMERLY SOBHA DEVELOPERS LTD.) ANUGRAHA, SRIPURAM, POONKUNNAM, THRISSUR, REPRESENTED BY ITS AUTHORIZED SIGNATORY V.G.VENUGOPAL. BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM) SRI.M.RAJAGOPAL RESPONDENTS: 1 THE ASST. COMMISSIONER (WORKS CONTRACT), COMMERCIAL TAXES, TAX TOWERS, KARAMANA, THIRUVANANTHAPURAM-695 002. 2 THE DEPUTY COMMISSIONER (APPEALS), TAX TOWERS, KARAMANA, THIRUVANANTHAPURAM-695 002. 3 THE KERALA VALUE ADDED TAX APPELLATE TRIBUNAL ADDL.BENCH, SASTHAMANGALAM, THIRUVANANTHAPURAM-695010. OTHER PRESENT: SR GP TAX MOHAMMED RAFIQ THIS OP TAX HAVING COME UP FOR ADMISSION ON 16.07.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

O.P.(Tax).No.5 of 2019 -:2:- C.K.ABDUL REHIM & R.NARAYANA PISHARADI,JJ. = = = = = = = = = = = = = = = = = = O.P(Tax) No.5 of 2019 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 16th day of July,2019 J U D G M E N T C.K.ABDUL REHIM

, J. Challenge raised is against Ext.P5 interim order passed by the Kerala Value Added Tax/Agricultural Income Tax & Sales Tax Appellate Tribunal, Additional Bench, Thiruvananthapuram, in I.P. No.547 of 2018 in T.A.(VAT) No.394 of 2018, dated 13.06.2019. Assessment made with respect to the year 2013-14 was challenged at the instance of the petitioner before the first Appellate Authority. Not being satisfied with the order passed, the petitioner took up the matter in a second appeal before the Tribunal. An interim application was moved seeking stay against realisation of the amounts in dispute, pending disposal of the appeal. The Tribunal found that there is no payment effected so far.

O.P.(Tax).No.5 of 2019 -:3:- Therefore it was insisted upon that the petitioner should pay 30% of the total demand, for granting interim stay, and also to execute a bond for the balance amount. The petitioner contends that the order is passed quite mechanically without adverting to the grounds raised and without any proper application of mind with respect to merits of the appeal. Insistence made merely on the basis that no payment is made so far, cannot be taken as a legal approach for imposing the condition, is the argument. 2. Heard; learned Government Pleader appearing for the respondents. 3. Even though we are convinced that the prima facie appreciation of merit is not reflected in the impugned order, we are not proposing to remit the matter for fresh consideration and for passing fresh orders, because we are of the opinion that the appeal itself can be heard on an early date. As an equitable relief, we think it appropriate to reduce the quantum of interim payment directed, pending disposal of the appeal. Hence the above Original Petition is disposed of by

O.P.(Tax).No.5 of 2019 -:4:- modifying the impugned order of the Tribunal by directing the petitioner to deposit 20% of the amount due, which is disputed in the appeal and to execute a simple bond for the balance amount, within 30 days from today. If such deposit is made, the Tribunal shall dispose of the appeal at the earliest possible. Sd/- C.K.ABDUL REHIM JUDGE Sd/- R. NARAYANA PISHARADI JUDGE DST

O.P.(Tax).No.5 of 2019 -:5:- APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 20.5.2016 ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2013-14. EXHIBIT P2 TRUE COPY OF APPELLATE ORDER DATED 12.2.2018 ISSUED BY THE 2ND RESPONDENT IN RESPECT OF EXT.P1. EXHIBIT P3 TRUE COPY OF APPEAL MEMORANDUM FILED AGAINST EXT-P2 BEFORE THE 3RD RESPONDENT. EXHIBIT P4 TRUE COPY OF THE APPLICATION FOR STAY FILED IN EXT-P3 APPEAL. EXHIBIT P5 TRUE COPY OF STAY ORDER DATED 13.6.2019 ISSUED BY THE 3RD RESPONDENT. RESPONDENTS' EXHIBITS : NIL //True copy// P.A.To Judge

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