Appellate authorities must apply legal principles actively when granting stay orders, ensuring decisions are not arbitrarily imposed.

JUDGMENT

Petitioner is an assessee under the KVAT Act. Ext.P1 is the assessment order passed against her for the year 2010-11. Challenging the assessment order, petitioner filed Ext.P2 appeal along with Ext.P3 stay petition. During the pendency of the appeal, recovery proceedings were initiated. At that stage, petitioner filed W.P(C).27980/12. This Court, by Ext.P5 judgment, disposed of the writ petition directing disposal of the stay petition and to keep in abeyance the recovery proceedings that were initiated. Accordingly, stay petition was heard and the appellate authority has passed Ext.P6 order granting stay on condition that the petitioner remits 25% of the amount due under Ext.P1. It is challenging this order, the writ petition is filed.

2. The contention raised by the counsel for the petitioner is that the appellate authority has not complied with the principles laid down by this Court in Ext.P7 judgment in W.A.1641/08, in which this Court has held that, while dealing with the stay W.P.(C).5311/13 petitions, the appellate authority should not pass 'tailor made' orders and should apply its mind and pass orders dealing with the case of the parties. The question is whether Ext.P6 order now passed by the appellate authority satisfies the law laid down in Ext.P7.

3. In Ext.P6 order, the appellate authority has held thus:-

“I have examined the arguments of the appellant. It is seen from the records that the assessing authority has levied tax also based on the decision of the Honourable High Court of Kerala in Cement House v. State of Kerala reported in [2010 (18) KTR 329 (Ker.)] where it was held that the purpose of explanation VII is to levy tax on the actual sales price irrespective of whether it is received by the dealer at the time of sale of goods or the purchase itself. In the instant case, the sustainability or otherwise of the levy of tax on the discount amount can only be decided at the time of final hearing of the appeal. Subject to this, conditional stay is granted and hence, the following orders are passed.”

4. A reading of this order shows that the appellate authority heard the counsel for the petitioner, noticed the main contentions, perused the assessment order and has also taken note of the fact that the assessing Officer has followed the judgment of this Court in Cement House v. State of Kerala reported in [2010 (18)

W.P.(C).5311/13 KTR 329 (Ker.)] and completed the assessment. It was on that basis, having been satisfied with the prima facie case made by the petitioner, the appellate authority has passed Ext.P6 order. In my view, this order cannot be said to be the one passed without any application of mind. Further, the condition imposed by the appellate authority requiring the petitioner to remit 25% of the amount also cannot be said to be an onerous one justifying interference by this Court. Therefore, I am not persuaded to interfere with Ext.P6.

Writ petition is dismissed.