THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE RAMESH RANGANATHAN WRIT PETITION No. 16970 of 2009 Dated: 20-8-2009 Between: Bharat Electronics Limited, Industrial Estate, Nacharam, Hyderabad rep, by its authorised signatory Smt Padmasri Rangan, Hyderabad. …Petitioner and The Assistant Commissioner (CT) (LTU), Saroornagar Division, Hyderabad and another. …Respondents. ORAL ORDER: (Per GR , J) The 2nd respondent by an order dated 5-8-2009 declined grant of stay to the petitioner. As a consequence, the petitioner apprehends initiation of coercive process by the respondents to collect the assessed tax liability, as confirmed by the appellate authority. The petitioner is a dealer registered under the A.P. VAT Act, 2005 (for short ‘the Act’). In respect of the assessment year 2007-08 it claimed input tax credit on generators and its parts. By the order of assessment passed by the 1st respondent, the input tax credit on generators and its parts in an amount of Rs.3,86,481-00 was disallowed for reasons recorded therein, which are not germane for the purposes of this writ petition. The petitioner preferred an appeal to the appellate Deputy Commissioner, Hyderabad and filed an application for stay before the 2nd respondent. By an order dated 27-1-2009, the 2nd respondent granted stay of collection of the disputed tax pending the appeal before the Appellate Deputy Commissioner, on condition of the petitioner depositing 50% of the disputed tax for two assessment years, 2006-07 and 2007-08. The petitioner asserts to have deposited the amount as stipulated in the order of the 2nd respondent dated 27-1-2009. By the order dated 10-6-2009, the Appellate Deputy Commissioner dismissed the appeal reiterating the view of the assessing officer that the petitioner is not entitled to claim input tax credit on the generators and parts thereof, in view of Rule 29 (2)(k) of the AP VAT Rules, 2005. The petitioner thereupon preferred an appeal to the Sales Tax Appellate Tribunal (for short ‘the STAT’) on 17-7-2009 and moved an application before the 2nd respondent on the same date, seeking stay of collection of the liability as assessed by the primary authority and confirmed by the Appellate Deputy Commissioner. By the order dated 5-8-2009 (as already stated), the 2nd respondent declined to grant stay and that is how the petitioner is before this Court. It is not in dispute that pending the petitioner’s appeal before the Appellate Deputy Commissioner, the 2nd respondent by the order dated 27-1-2009 had granted stay of collection of the disputed tax to the extent of 50% on condition that the petitioner deposits 50% of the disputed tax, which the petitioner did deposit. The stay was granted pending the disposal of the appeal before the Appellate Deputy Commissioner. Section 31 (3) (a) to (c) are relevant to the issues presented for adjudication in this writ petition. These provisions read as under: 31. Appeal to Appellate Authority: 1) …… 2) …… 3) (a) Where an appeal is admitted under sub-section (1), the appellate authority may, on an application filed by the appellant and subject to furnishing of such security or on payment of such part of the disputed tax within such time as may be specified, order stay of collection of balance of the tax under dispute pending disposal of the appeal; (b) Against an order passed by the appellate authority refusing to order stay under clause (a), the appellant may prefer a revision petition within thirty days from the date of the order of such refusal to the Additional Commissioner or the Joint Commissioner who may subject to such terms and conditions as he may think fit, order stay of collection of balance of the tax under dispute pending disposal of the appeal by the appellate authority; (c) Notwithstanding anything in clauses (1) or (b), where a VAT dealer or TOT dealer or any other dealer has preferred an appeal to the Appellate Tribunal under Section 33, the stay, if any, ordered under clause (b) shall be operative till the disposal of the appeal by such Tribunal, and, the stay, if any ordered under clause (a) shall be operative till the disposal of the appeal by such Tribunal, only in case where the Additional Commissioner or the Joint Commissioner on an application made to him by the dealer in the prescribed manner, makes specific order to that effect. The earlier order of the 2nd respondent dated 27-1-2009 is an order referable to the power and discretion under Section 31 (3) (b) i.e., stay granted pending appeal by the assessee or dealer, as the case may be, by the revisional authority. On a true and fair construction of the provisions of Section 31 (3) (c), the interpretation is compelling and verified by a non abstante provision that where a VAT or TOT dealer or any other dealer has preferred an appeal to the STAT under Section 33, the stay, if any, ordered under clause (b) shall be operative till the disposal of the appeal by the STAT. In the above statutory context and in the circumstance that the revisional authority earlier by the order dated 27-1-2009 had granted stay (in terms of the said order) pending the appeal preferred by the petitioner before the appellate Deputy Commissioner, the stay would enure (be operative) during the currency of the appeal before the STAT, now pursued by the petitioner. No application for stay need have been made by the petitioner to the 2nd respondent-revisional authority and even if made, the 2nd respondent ought to have returned such application on the ground that he has no jurisdiction to exercise any discretion, in view of the mandatory provision of Section 31 (3) (c) of the Act. Not only did the 2nd respondent entertain the petitioner’s application, but he passed the order dated 5-8-2009 which is dissonance with the clear mandate of Section 31 (3) (c) of the Act. This order, therefore, beseeches invalidation and is accordingly quashed. The stay dated 27-1-2009 granted by the 2nd respondent would continue in operation pending disposal of the appeal by the STAT. With the above clarification and quashing the order dated 5-8-2009 of the 2nd respondent, the writ petition is allowed, after hearing the learned Special Government Pleader for Commercial Taxes Sri Krishna Koundinya. No costs however. ___________________________ GODA RAGHURAM, J _______________________________ RAMESH RANGANATHAN, J 20th August, 2009. GRR