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Madras High CourtWP(MD)/16901/2018ordered

M/S.Sai Saravana v. The Appellate Deputy

2018-07-31Honourable Mr Justice M. Govindaraj4 pages

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 31.07.2018

CORAM

THE HONOURABLE MR.JUSTICE M.GOVINDARAJ W.P.(MD) Nos.16901 to 16904 of 2018 W.M.P.(MD) Nos.14925 to 14927 of 2018 In W.P.(MD) No.16901 of 2018:

M/s.Sai Saravana Pharmaceuticals, Represented by its Proprietor S.Thiyagarajan ... Petitioner Vs.

... Respondents PRAYER: Writ petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records of the first respondent in SP.No.147/2018/VAT.AP.No.296/2018 dated 04.07.2018 (Asst.Year 2011-12) and quash the same insofar as the direction to file security bond or bank guarantee and grant stay till the disposal of the appeal and further direct the second respondent to W.P.(MD) No.16902 of 2018:

M/s.Sai Saravana Pharmaceuticals, Represented by its Proprietor S.Thiyagarajan ... Petitioner Vs.

... Respondents PRAYER: Writ petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records of the first

respondent in SP.No.150/2018/VAT.AP.No.297/2018 dated 04.07.2018 (Asst.Year 2014-15) and quash the same insofar as the direction to file security bond or bank guarantee and grant stay till the disposal of the appeal and further direct the second respondent to W.P.(MD) No.16903 of 2018:

M/s.Sai Saravana Pharmaceuticals, Represented by its Proprietor, S.Thiyagarajan ... Petitioner Vs.

... Respondents PRAYER: Writ petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records of the first respondent in SP.No.149/2018/VAT.AP.No.298/2018 dated 04.07.2018 (Asst.Year 2015-16) and quash the same insofar as the direction to file security bond or bank guarantee and grant stay till the disposal of the appeal and further direct the second respondent to W.P.(MD) No.16904 of 2018:

M/s.Sai Saravana Pharmaceuticals, Represented by its Proprietor, S.Thiyagarajan ... Petitioner Vs.

... Respondents PRAYER: Writ petition is filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records of the first respondent in SP.No.148/2018/VAT.AP.No.299/2018 dated 04.07.2018 (Asst.Year 2016-17) and quash the same insofar as the direction to file security bond or bank guarantee and grant stay till the disposal of the appeal and further direct the second respondent to

For Petitioner : Mr.R.D.Ganesan For Respondent 1 & 2: Mrs.J.Padmavathi Devi, Special Government Pleader in all the WP's

ORDER

Aggrieved over the orders passed by the appellate authority on the stay petitions filed by the petitioner, the present Writ Petitions have been filed.

2. The Appellate Deputy Commissioner (CT), the first respondent herein, has granted stay on condition of payment of Rs.5,15,362/- in respect of VAT AP. 296 of 2018 for the assessment year 2011-2012 and a sum of Rs.90,465/- in respect of VAT AP.297 of 2018 for the assessment year 2014-2015 and payment of Rs.1,54,315/- in respect of VAT AP. 298 of 2018 for the assessment year 2015-2016 payment of Rs.64,465/- in respect of VAT AP. 299 of 2018 for the assessment year 2016-2017 and also imposed another condition that for the rest of the amount, security bond or bank guarantee shall be produced for a period of six months. The condition imposed, according to the petitioner, is causing irreparable injury and he is not in a position to pay such a huge amount. The petitioner has paid 50% of tax amount to the department.

3. The learned counsel for the petitioner would vehemently contend that the respondents always have the first charge over the movable and immovable properties of an assessee, by virtue of the provisions of Section 42(1) of the Tamil Nadu Value Added Tax Act, 2006. Therefore, the impugned orders relating to furnishing of security bond or bank guarantee are liable to be set aside.

4. I have considered the rival contentions made on either side.

5. It is well settled law that there is no straitjacket formula for grant of full or conditional stay or for refusal of stay. The most important factors to be considered are the prima facie case and the hardship to the assessee. Whether the tax has been collected by the dealer has also to be considered. The fourth factor is the balance of convenience or irreparable injury.

6. In the present case, the dealer has paid 50% of tax amount to the department and the petitioner was asked to furnish security bond or bank guarantee for the balance of tax and penalty. In such circumstances, it is no doubt that it will cause financial hardship to the assessee.

7. In my considered view, since the petitioner has paid 50% of tax amount to the department and the respondents have the first charge over the movable and immovable properties, the order passed by the first respondent directing the petitioner to furnish security bond or bank guarantee is excessive. Therefore, it will be in the interest of justice, if a direction is issued to the petitioner to furnish a personal bond for the balance amount of tax due and penalty.

8. In the result, the Writ Petitions are partly allowed and the condition imposed by the first respondent to furnish bank guarantee or security bond alone is set aside and the same is modified as follows:

'The petitioner shall execute a personal bond for the balance tax amount and penalty for the respective assessment years, within a period of two weeks from the date of receipt of a copy of this order. The petitioner shall keep the bond alive till the disposal of the appeals by the first respondent.'

9. The stay will continue till the disposal of the appeals by the first respondent. No costs. Consequently, the connected miscellaneous petitions are closed.

sd/- Assistant Registrar (CS-II) /True Copy/ Sub Assistant Registrar(CS-III) To +4cc to Mr.R.D.Ganesan, Advocate SR.No.75952,75957,75958,75959 +1cc to SPECIAL GOVERNMENT PLEADER, SR.No.76395 Cm MK/RP/SAR 3/27.08.2018/4P/8C W.P.(MD) Nos.16901 to 16904 of 2018 W.M.P.(MD) Nos.14925 to 14927 of 2018 31.07.2018