Judgment:
Ferdino I. Rebello, J.
1. Rule. By consent of parties, heard forthwith.
2. The first grievance as raised by the petitioner herein is that they have made an application for stay and had given various reasons as to why stay should be granted. Their application has been rejected. There is no reasoned order and the order communicated to them is in terms as set out in Exhibit K to the petition.
3. The learned Counsel for the petitioner draws our attention to Form No. 311 under the Maharashtra Value Added Tax Act, 2002 (VAT Act) which is an application for grant of stay and Form No. 312 under Rule 33 which is described asAdmission memo-cum-stay order under Section 26 of the Maharashtra Value Added Tax act, 2002. It is pointed ot that the stay is invariably in terms of Form No. 312 and no reasons are given for granting stay or rejecting application for stay.
4. In our opinion, Form No. 311 can only be described as a proforma of the manner in which the application has to be moved by the party. Along with the form it is always open and the the party must give justification in support of the application for stay. The Tribunal must have the material based on which a party is applying for stay.
5. The Authorities under the VAT Act considering applications for stay are exercising quasi-judicial functions. Once that be the case, a Tribunal exercising quasi-judicial functions,while passing an order on an application for stay has to give reasons. Failure to give reasons would result in setting aside the order as a non-speaking order. Apart from that a higher Court which exercises jurisdiction over the orders passed by the Tribunal either as an appellate Court or revisional Court or Court exercising supervisory jurisdiction must know the reasons based upon which the Tribunal proceeds to grant or reject the application for stay. Form No. 312 if read, as a form for granting order of stay would be clearly arbitrary and will have to be struck down as interfering with the judicial process and administration of justice. The Legislature and or its delegate cannot curtail judicial discretion as that would interfere with the independence of the judiciary which is a basic feature of our Constitution (See Registrar (Administration) High Court of Orissa Cuttack v. Siser Kanta Satapathy (dead) by L.Rs and Anr. AIR 1999 SCJ 261. However, considering Rule 33, at the highest, Form 312 can be read to mean that it is only a communication of the operative part of the order passed by the Tribunal.
6. This order will apply to all proceedings before a quasi-judicial Tribunal exercising powers under the provisions of the VAT Act. Rule 312 will have to be so suitably read.
7. We, therefore, direct all authorities exercising quasi-judicial functions under the VAT Act, that when an application for stay is moved, to give reasons as any other quasi-judicial Tribunal entrusted with judicial functions. While passing an interim order, the Commissioner of Appeals/Tribunal shall bear in mind whether the party has made out a prima facie case. See Indu Nissan OXO Chemicals Industries Ltd. v. Union of India : 2008 (221) E.L.T.7 (S.C.) where the Supreme Court observed as under:
It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand....
In other words, when there are strong arguable points then to consider the financial hardship and the balance of convenience relating to deposit. Waiver of deposit and quantum of deposit should be decided by applying this test. In the instant case, the order communicated to the parties dated 4.6.2009 clearly discloses no reasons as to why the application for stay as moved by the petitioner herein was not considered. In our opinion, therefore, that order will have to be set aside.
8. The next issue is whether the matter should be sent back to the Joint Commissioner of Sales Tax (Appeals) or this Court itself should issue directions considering that the controversy involves a large number of matters. On behalf of the respondents, learned Counsel placed reliance on the Judgment of the Supreme Court in Federal Bank Ltd. and Ors. v. State of Kerala and Ors. : (2007) 4 SCC 188. Learned Counsel for the petitioner submits that the Judgment would not apply to the Maharashtra Value Added Tax considering that in Kerala the definition of of the word dealer was amended to include a bank or a financial institution which, whether in the course of its business or not, sells any gold or other valuables pledged with it to secure any loan for the realisation of such loan amount. It is pointed out that in Maharashtra, there is no such amendment. Apart from that, it is submitted that there is difference between a pledge and hypothecation. Hypothecation , at any rate, cannot amount to sale.
9. We do not propose to go into that issue since it is an arguable matter. . Once there is an arguable case, the question is the relief that a party would be entitled to. It is pointed out that before the Judgment in Federal Bank Ltd. and Ors. (supra), no demand was being made on such transactions. It is only subsequent to that judgment that the demand is being made.
10. In these circumstances, in our opinion, the ends of justice will be met if the application for interim stay as applied for by the petitioner before the Tribunal is allowed and they are allowed to proceed with the appeal without any pre-deposit. We however, direct the Commissioner (Appeals) to dispose of the appeal not later than two months from today. Parties to serve a copy of this order on the Tribunal.
Rule made absolute accordingly. No order as to costs.
11. A copy of the order be forwarded to the Chairman, Sales Tax Tribunal. We direct the Chairman, Sales Tax Tribunal, to forward a copy of this Order to all the Tribunals under his jurisdiction.