2004 (7) TMI 346 - SC - VAT and Sales Tax

Non furnish of surety bond before the Assessing Authority - Held that - Appeal allowed. Sufficient cause for delay in compliance with the order dated August 10, 1999 made by the Joint Commissioner was made out and, therefore, the appellant deserves to be afforded an opportunity of hearing on merits.

Summary

Issues:
- Appeal against order of assessment under Haryana General Sales Tax Act, 1973.
- Entertaining appeal without payment of tax subject to furnishing surety bond.
- Dismissal of appeal for failure to furnish surety bond.
- Filing of writ petition before High Court.
- Challenge to orders dated August 10, 1999 and August 25, 1999.
- Liability imposed on the appellant.
- Claim of self-employment and disproportionate liability leading to business closure.
- Appeal allowed, setting aside the order of dismissal and remanding for hearing on merits.

Analysis:
The appellant appealed against the order of assessment under the Haryana General Sales Tax Act, 1973. The appeal could not be entertained without payment of tax unless a surety bond was furnished. The Joint Commissioner allowed the appeal without payment of tax, subject to furnishing a surety bond. However, the appellant failed to furnish the bond within the specified time, resulting in the dismissal of the appeal. Subsequently, the appellant filed a writ petition before the High Court challenging the dismissal. The High Court dismissed the petition, leading to the appellant filing a special leave appeal before the Supreme Court.

The Supreme Court, after hearing both parties, found that the circumstances warranted setting aside the order of dismissal by the Joint Commissioner and remanding the appeal for a hearing on merits. The appellant, a self-employed technical entrepreneur, faced a substantial liability that led to the closure of his business. The Court acknowledged the sufficient cause for the delay in compliance with the order to furnish the surety bond. As a result, the Court allowed the appeal, setting aside the order of dismissal and directing the extension of time for compliance with the bond. The appeal was to be heard and decided on its merits by the Joint Commissioner.

In conclusion, the Supreme Court allowed the appeal, setting aside the dismissal order, and remanded the case for a hearing on merits. The Court recognized the appellant's circumstances and provided an opportunity for a fair hearing. The liability imposed on the appellant was considered disproportionate to his means, justifying the need for a review of the case.