UT Adviser can function as VAT tribunal chief: SC

Top court stays High Court order passed in April this year

Satya Prakash

Tribune News Service

New Delhi, July 3

The Supreme Court today stayed a Punjab and Haryana High Court order restraining the UT Adviser-cum-Chairman of Chandigarh Value Added Tax (VAT) Tribunal from passing final orders in cases pending before him till further orders.

“Until further orders, there shall be stay of operation of the impugned judgment and order passed by the High Court,” a Bench of Justice SA Bobde and Justice BR Gavai said.

The order came after Solicitor General Tushar Mehta submitted on behalf of the Union Territory of Chandigarh that the High Court order had seriously affected the functioning of the VAT tribunal.

The top court also issued notice to Ind Swift Limited – on whose petition the High Court had passed the stay order – asking it to respond to the UT Administration’s petition challenging the April 11 order of the High Court.

Ind Swift Limited had challenged the appointment of the Adviser as the chairman of the tribunal under Section 4 of the Punjab Value Added Tax (PVAT) Act and an assessment order issued against the firm. The tribunal must consist of more than one member as per Section 4 of the PVAT Act extended to the UT, the petitioner had submitted.

The petitioner’s counsel had submitted before the HC that the Adviser was performing a part-time duty of the chairman of the tribunal. Being a functionary of the UT Administration, his appointment amounted to transfer of judicial function to the executive, which was impermissible.

The UT counsel had contended before the HC that there were only 30 appeals pending before the tribunal. The constitution of a one-member tribunal was no violation of the PVAT Act. As per Section 4(3) of the PVAT Act, a single member may be appointed instead of two-three members, the counsel had claimed.

In its order, the High Court had said, “This court cannot doubt the integrity or administrative ability of the Adviser but he cannot be expected or viewed to be independent and impartial when he is the overall in-charge of affairs of the UT. In view of the aforesaid observations, we are of the prima facie opinion that the appointment of the UT Adviser as the chairman of the tribunal without a judicial member is against the mandate of the Supreme Court. So we deem it appropriate to direct the UT Adviser/tribunal not to pass final orders in any of the pending appeals till further orders.”

The HC had directed that no coercive steps shall be taken to recover alleged dues from the owner of Ind Swift as per the assessment order dated January 14 this year. The owner of the firm was asked to deposit tax to the tune of Rs 14.33 crore for alleged wrong availment of input tax credit for the year 2011-12. There is an additional demand of interest of Rs 20.15 crore with a penalty of Rs 31.61 crore.

An appeal filed before the District Excise and Taxation Commissioner (A) was dismissed on February 15 over non-compliance of requirement of pre-deposit of 25 per cent of the demand under Section 62(5) of the PVAT Act. The petitioner later filed an appeal before the VAT tribunal, which is pending.

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