VAT and service Tax on Tata Teleservices – Pre-deposit – Supreme Court does not interfere
OUT there, the Netizens are very well-informed. A leading lawyer told us sometime back that TIOL is putting him to embarrassing situations. Earlier, the assessees came to know about the Laws and cases only when he told them; now they see it in TIOL and call him up and inform him; so he is forced to spend time with TIOL many times a day.
Even we were hauled up – yesterday I received several calls from enlightened Netizens finding fault with us for not reporting the Tata Teleservices case, wherein the Supreme Court dismissed the party's appeal as reported in the pink media.
Actually there was nothing very serious to report – it was only a matter of pre – deposit.
Anyway here is the dramatic story.
Tata Teleservices approached the High Court of Andhra Pradesh in Writ Petition seeking stay of recovery of VAT imposed by the Assistant Commissioner, Commercial Taxes on the ground that they are paying service tax and so are not liable to pay any tax under the provisions of the Andhra Pradesh Value Added Tax Act. It has been further submitted that according to the law laid down by the Supreme Court in the case of Bharat Sanchar Nigam Ltd. V. Union of India -[], the petitioner is rendering services and, therefore, there is no question of paying tax under the provisions of the Act. It was, therefore, submitted that no amount of tax should be recovered under the provisions of the Act and the proceedings whereby tax is sought to be recovered should be stayed during pendency of the petition.
The State Revenue pleaded that in similar cases, the High Court had stayed the recovery proceedings on a condition that the petitioners pay one-third of the amount of tax payable by them. The Party argued that payment of one-third of the amount of tax should not be treated as a precedent and the matter should be considered on merits by the Court and, therefore, looking to the facts of the case, no amount should be directed to be paid by the petitioner.
The High Court in its order, [] directed by way of interim relief, that there shall be stay with regard to recovery of the amount covered by the impugned order subject to a condition that the petitioner pays one-third of the disputed tax.
The disputed tax amounts were Rs.12,02,20,876 /- for the year 2005-06 and for Rs. 17,62,70,299/- for the year 2006-07, totalling Rs. 29,64,91,175/-. So they were required to deposit about Rs. 9.88 Crores.
Against the order of the High Court, Tata Teleservices approached the Supreme Court. The Apex Court did not find any ground to interfere with the impugned order and so dismissed the petition. However the Supreme Court gave time till 15th April, 2009 to make the deposit. [-AP-VAT]
So that's the whole story.