Decided on June 13,1950

State of Orissa and Ors. Respondents


A. Pasayat, J. - (1.) SINCE the three applications involve common points of dispute, they are heard together. Though the cases were listed for admission, at the request of the learned Counsel for the Petitioner and the Commercial Taxes Department, they are taken up for hearing and final disposal.
(2.) THESE writ applications have been filed by a Government of India Undertaking questioning the correctness, legality and propriety of the order passed by the Commissioner of Sales Tax, Orissa while dealing with an application for stay of realization of extra demands of sales tax, during pendency of reference applications under Section 24(1) of the Orissa Sales Tax Act, 1947 (in short 'the Act') for the assessment years 1984 -85 and 1986 -87. The Petitioner was assessed under the provisions of the Act and the Orissa Additional Sales Tax Rules, 1975 (in short 'the Rules'). Total demand raised against the Petitioner was little above Rupees two cores seventeen lakhs. A Full Bench of the Orissa Sales Tax Tribunal upheld the levy of the tax on the Petitioner. Petitioner has filed applications for reference to this Court. The Petitioner moved the Commissioner of Sales Tax for stay, taking a stand that receipts by Corporation -Petitioner did not amount to taxable receipts and in any event, the provisions of the Act have no application to its case. The Commissioner by his order as contained in Annexure -3 in each of the writ applications permitted the Petitioner to pay the entire extra demand in six installments. While so directing the Commissioner observed? That the Petitioner accepted the liability to pay and only prayed that if suitable monthly installments are granted, it shall be in a position to deposit the extra demand. It has been submitted by the Petitioner that the Commissioner only considered the alternative submission of the Petitioner, but did not refer to the main plank of the Petitioner 's argument about non -taxability and desirability of order of stay. According to the learned Counsel for the Petitioner, It had made out a prima facie case for grant of stay of realization of extra demand and non -consideration thereof vitiated the order. It has also been submitted by an affidavit that notwithstanding the order of conditional stay passed by the Commissioner and pendency of the writ application, notices of attachment have been issued to various persons completely paralyzing the financial operation of the Corporation -Petitioner. On behalf of the Commercial Taxes Department, the learned Counsel submits that the Commissioner considered both the contentions raised by the Petitioner and rejecting the contention relating to grant of stay, accepted the alternative prayer for installments and therefore, the order does not suffer from any illegality to warrant any interference in the writ applications. On a perusal of the order, I find that Petitioner 's submission relating to non -taxability transaction and desirability of granting full stay has not been adequately dealt with. Though at the time of disposing of the application for stay, the concerned authority is not required to elaborately detail the reasons as held by this Court in the case of Tata Robins Frasers Limited and Anr. v. Sales Tax Officer Rourkela I Circle and Ors., (1989) 75 STC 277 the order has to indicate whether various points urged have been considered. It has to indicate application of mind. If the authority refuses to grant stay, the order should ex facie disclose why he declined to grant stay. Section, (1973) 32 STC 465 Chesebrough Ponds Inc. v. The Appellate Assistant Commissioner (C.T.) III Madras and Anr. As held by this Court in Tata Robins case (supra), the authority dealing with the stay application must consider the prima facie nature of the case, the balance of convenience, the loss and injury to be suffered by either party in case of grant or refusal of stay and all other germane matters. Similar view was expressed by the Madras High Court in, (1989) 72 STC 417 Sri Balaji Trading Company v. Deputy C.T.O. Mettur Road Circle Erode and Anr. In the instant case, the Commissioner has laid great stress on the alternative prayer of the Petitioner that it may be granted suitable installments for payment of tax dues, Demand in dispute is substantive and the very fact that decision of the Tribunal was by a majority, lends some credence to the Petitioner's assertion that it has a prima facie case. The question whether the Petitioner is facing acute financial hardship has not been properly considered by the Commissioner. While granting or refusing stay, capability of a person who has been saddled with extra demand is a determinative factor. Merely because realization of demand may be in the public interest, yet a Government of India Undertaking which claims to be in financial distress should not be affected in the manner to render its operations unworkable. Though the Commissioner indicated the essential features to be considered while considering the stay application, he did not record positive findings thereon. Interest of justice would be best served if the matter is heard afresh by the Commissioner. The Petitioner is permitted to file additional applications elaborating the grounds of challenge and the germane factors. If the Petitioner makes such an application by 22 -6 -1990, the Commissioner shall rehear the matter and dispose of the same by 9 -7 -1990. As an interim measure, the Petitioner is directed to deposit a sum of Rs. 10,00,000/ - by the end of June, 1990. The order of attachment which is stated to have been issued will remain inoperative till disposal of the matter by the Commissioner afresh. Needless to say that the order of the Commissioner as contained in Annexure -3 is inoperative, because he has been asked to re -consider the matter.
(3.) THE writ applications and the misc. cases arising there from are disposed of.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.