1964 (4) TMI 108 - HC - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the Sales Tax Appellate Tribunal regarding payment of tax as a condition for entertaining appeals.
2. Application of section 21(6) of the Andhra Pradesh General Sales Tax Act.
3. Judicial discretion and reasonableness in compelling payment of tax within a short period.
4. Impact of granting adequate time for tax payment on the collection process.

Analysis:
1. The petitioners sought writs of mandamus to direct the Sales Tax Appellate Tribunal to refrain from enforcing orders requiring them to pay the entire sales tax and provide proof of payment as a condition for entertaining their appeals. The Assistant Commissioner of Commercial Taxes had dismissed their appeals for non-payment of tax within 7 days. The Tribunal, under section 21(6) of the Act, asked for proof of tax payment before entertaining the appeals. The main contention was that section 21(6) did not apply as the tax amount was not determined by the Assistant Commissioner in the dismissed appeals. The court held that the Tribunal's order was without jurisdiction as the provision required a determination of tax liability by the appellate authority, which was lacking in this case.

2. Section 21(6) mandates that no appeal shall be entertained by the Tribunal without proof of tax payment as determined in an appeal under section 19. The court emphasized that this requirement applies only when the appellate authority determines the tax payable by the appellant. Since the Assistant Commissioner dismissed the appeals without assessing the tax liability, the condition of payment or proof of payment as per section 21(6) was deemed inapplicable. The court highlighted that the provision necessitates a quasi-judicial determination of tax liability by the appellate authority, which was absent in this scenario.

3. The court criticized the Assistant Commissioner's order compelling immediate tax payment within 7 days under penalty of appeal dismissal as unreasonable and arbitrary. It stressed that such actions rendered the right of appeal illusory and violated principles of judicial discretion. The court emphasized that quasi-judicial processes must be followed by tribunals, and orders like these must afford reasonable time for tax payment to uphold the right of appeal. While refraining from setting aside the Assistant Commissioner's orders due to pending appeals before the Tribunal, the court directed the Tribunal to grant a reasonable time for tax payment to enable a proper disposal of the appeals.

4. The court highlighted the importance of granting adequate time for tax payment to prevent delays in the collection process. It noted that undue haste in demanding tax payment could lead to prolonged legal proceedings, ultimately benefiting the assessees in delaying tax payment. The court urged the Tribunal to expedite the handling of the cases to prevent any attempts by the assessees to prolong the process for their advantage. Ultimately, the court directed the Tribunal to consider the cases without the requirement of tax payment as determined by the Assistant Commissioner, emphasizing the lack of such determination in the dismissed appeals.