By C. B. Thakar Advocate G. G. Goyal
Janak Vaghani Chartered Accountants
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Value Added Tax – Recovery Of Tax – Garnishee Proceedings – Issue of Notice Directing Bank to Remit the Tax – During the Pendency of Revision Petition – Against Order Rejecting Stay Application – Set Aside – Directed to Remit Back the Amount Recovered – Cost Awarded, section 29 of The Andhra Pradesh Value Added Tax Act, 2005.
FACTS
The Petitioner is a charitable trust and also registered under the AP VAT Act had filed appeal against the assessment order passed by the assessing authority and also file application for stay. The appellate authority rejected the application for stay by passing non speaking order. The Petitioner filed revision petition before the higher revisional authority. During the pendency of the revision petition, the assessing authority invoking power u/s. 29 of the Act issued notice directing the Bank, where the petitioner had account, to remit the disputed amount. The Bank remitted the amount to the assessing authority. The Petitioner filed writ petition before the AP High Court against the Garnishee order issued by the assessing authority directing the bank to remit the amount to the department.
HELD
If recoveries of disputed tax or penalty are made, where stay application is pending before the appellate authority, the appeal itself would be rendered infructous and that the assessee who is aggrieved by an order of assessment is given a statutory right of appeal which cannot be rendered infructous by being forced to pay the disputed amount pending the appeal. This will apply to a situation where the first appellate authority rejects the stay application and a revision is preferred by the assessee before the revisional authority seeking stay of the disputed amount. Therefore it would be just and proper for the assessing authority to await the disposal of the revision petition by the revisional authority. The High Court strongly deprecated the conduct of the assessing authority and held it to be arbitrary and high handed and awarded cost to the department of Rs. 10000/- payable to the petitioner. Accordingly, the High Court allowed the writ petition filed by the Trust and directed the department to remit back the amount recovered forcefully to the Bank account of the Petitioner and set aside the non speaking order passed for rejecting stay petition and remanded back for fresh hearing.
