The main legal point established is the permissibility of executing personal bonds instead of Bank Guarantees for the payment of disputed tax during appellate proceedings.

1. By consent, the writ petitions are taken up for final disposal at the stage of admission itself.

2. Heard Mrs. C.Rekha Kumari, learned counsel appearing for the petitioner and Mr. A.R. Jaya Pratahp, learned Additional Government Pleader (Tax) for the respondents.

3. These writ petitions are directed against orders dated 27.11.2013, on the file of Appellate Deputy Commissioner (Commercial Tax), Chennai imposing a condition that the petitioner should produce Bank Guarantee for the tax amount during the currency of the appellate proceedings.

4. For the sake of brevity, facts are being taken from W.P.No.541 of 2013, as common question involved in these writ petitions. The facts leading to filing of these writ petitions read as follows:

i. The petitioner is a dealer in electronic goods, such as parts and accessories of computers. In the course of business, the petitioner received incentives and discounts from the suppliers based on lifting the stocks. Such incentives and discounts are in no way connected with the tax already paid by the petitioner to its suppliers. The impugned assessment year in dispute is 2009-2010 under TNVAT Act and issue centre around the reversal of ITC on receipt of incentives and discounts on the ground that the petitioner has not filed the reply.

ii. The petitioner states that it had availed ITC of the actual amount of tax paid by it and the same is adjusted towards the output tax payable on sales. The 2nd respondent reversed the claim of ITC on the ground that the petitioner has received discount through credit notes and passed on some portion of the discount to the customers. Against the proposal notice, the petitioner had filed a detailed reply but the same was overlooked and proposal was confirmed by reversing huge ITC. The validity of the provision of Section 19(20) of TNVAT Act 2006, was challenged before this Court and the validity was upheld in Jayam & Co., against which the matter has been taken by way of SLP before the Hon'ble Supreme Court of India and it is pending for disposal. So, in view of the pendency of matter before the Apex Court, the 2nd respondent ought to have kept the matter in abeyance. But, instead of doing so, he rushed through in completing the revision of assessment.

iii. The petitioner filed an appeal before the first respondent challenging the Assessment order passed by the second respondent. The appeal was taken on file by the first respondent along with a stay petition filed by the petitioner. The Appellate Authority was pleased to grant an order of stay, directing the petitioner to pay another 25% of the disputed amount of tax of Rs.71,410/- before the Assessing Authority on or before 26.12.2013. The Appellate Deputy Commissioner, imposed a further condition directing the petitioner to produce Bank Guarantee with respect to the balance amount of tax.

iv. It is submitted by the petitioner that entire liquidity is blocked in the stock available in the business premises and due to recession and fluctuation in dollar verses rupee, the petitioner was unable to move the stock as the stock that was purchased at higher price cannot be sold at lower price. Therefore, the petitioner had to hold the stock purchased at higher price and buy fresh stock for making counter sales. The bankers are also insisting upon 100% deposit to give bank guarantee and for such deposit there is no enough circulation of money with the petitioner. The amount involved is huge and the petitioner is not in a position to file security and thus, the said onerous condition is challenged in this writ petition.

5. The impugned orders have been challenged by the petitioner on the followings grounds:

a) that the order of the 1st respondent is contrary to law and opposed to the facts and circumstances of the case and the 2nd respondent erred in levying tax on the discount and incentives received during the impugned year, without even considering the aspect that such receipts from the suppliers do not form part of