M/S Shyam Traders vs Commissioner of Commercial Tax U.P. and Others

Hon''ble Ritu Raj Awasthi, J.—Notice on behalf of opposite parties No. 1 to 4 has been accepted by the learned Chief Standing Counsel.

With the consent of parties counsel, the writ petition has been heard finally at the admission stage.

The writ petition has been filed challenging the order dated 15.10.2011 passed in Second Appeal No. 476 of 2011 with a direction to the opposite parties not to initiate and realise the arrears of tax for the assessment year 2009-10.

Mr. Anand Dubey, leaned counsel for the Petitioner submitted that the final assessment was made by the opposite party No. 4 for the assessment year 2009-10. Against the assessment order, the Petitioner had preferred first appeal before the opposite party No. 3 Additional Commissioner Grade-I (Appeal). The first appellate court by order dated 4.10.2011 had stayed the 60% of the outstanding tax amount during the pendency of the first appeal.

The Petitioner feeling aggrieved preferred second appeal before the opposite party No. 2 which by order dated 15.10.2011 further granted relief staying the outstanding amount to the extent of 85%. Now the Petitioner is required to deposit 15% of the outstanding tax amount during the pendency of the first appeal.

The contention of the learned Counsel for the Petitioner is that in fact the total amount of tax demand is to the tune of Rs. 34,97,02,087/- and 15% of it comes to the tune of Rs. 5,00,00,000/-. The required tax which to be deposited by the Petitioner will still very high and he is not in a position to deposit the same as the first appeal is still to be heard and decided on merit. The Petitioner is abide by the decision so taken in the said first appeal. However, during the pendency of the appeal he should not be compelled to deposit the amount.

In support of his submission, the Petitioner has relied on a decision of this Court in Trade Tax Revision No. 141 of 2011 (Simla Gomti Pan Products through its Partner v. Commissioner of Commercial Tax U.P. and Ors. connected matters) dated 2.6.2011 as well as the judgment and order dated 25.5.2011 passed in Writ Petition No. 3149 (MS) of 2011 (Durga Trading Company through its proprietor v. Commissioner of Commercial Tax U.P. and Ors.), which has been passed relying on the judgment of the Apex Court in the case of Income Tax Officer v. M.K. Mohammad Kunhi AIR 1969 SC 430, Mehsana District Cooperative Mill Pvt. Ltd. v. Union of India 2003 (154) E.L.T. 348 (SC) and Shri Kihota Hollohon Vs. Mr. Zachilhu and others, and this Court''s judgment in the case of Moriroku Ut India Pvt. Ltd. Noida v. Union of India and Ors. reported in 2006 UPTC 274.

Mr. Sanjeev Sankhdhar, learned Standing Counsel on the other hand submits that the Petitioner has been already granted indulgence by the first appellate court as well as by the second appellate court/Tribunal and now he is required to deposit only 15% of the total tax demand. The Petitioner can not be said to be aggrieved as the amount deposited by the Petitioner is subject to the decision taken in the first appeal.

I have considered the submissions made by the parties counsel.

It is the admitted position that the first appeal preferred against the final assessment order is still to be decided on merit. In the similar facts and circumstances this Court has granted indulgence by allowing the Petitioner to deposit 10% of the tax demand. Since the amount of demand is reasonably high, therefore, this Court is of the view that in peculiar facts and circumstances of the case, the Petitioner shall deposit 10% of the total tax demand during the pendency of the first appeal.

In this view of the matter, the writ petition is partly allowed and the order dated 15.10.2011 passed by the learned Tribunal is modified to the extent that 90% of the tax amount shall remain stayed till the disposal of the first appeal and the Petitioner shall deposit 10% of the total tax demand within a month from today and also furnish the bank guarantee/surety for the remaining amount to the satisfaction of the assessing authority.