1988 (4) TMI 424 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Maintainability of the appeal without the deposit of admitted tax.
2. Interpretation of Section 9 of the U.P. Sales Tax Act before and after its amendment.
3. The legal effect of depositing the full tax during the pendency of the appeal.

Issue-wise Detailed Analysis:

1. Maintainability of the appeal without the deposit of admitted tax:
The assessee did not admit any tax liability on the turnover of imported kerosene oil during the assessment proceedings. The Assistant Commissioner dismissed the appeal on the preliminary ground of non-payment of admitted tax, a condition precedent for the maintainability of the appeal. The Tribunal upheld this dismissal, relying on the fact that the assessee had disclosed the turnover but had not admitted any tax liability. The Tribunal's decision was based on the interpretation that the admitted liability included the amount legally due, not just the amount admitted by the assessee.

2. Interpretation of Section 9 of the U.P. Sales Tax Act before and after its amendment:
Section 9 before amendment required satisfactory proof of payment of the amount of tax admitted by the appellant to be due. After the amendment, the provision required payment of the amount of tax found due under the Act. The court noted that the assessment and the filing of the appeal occurred before the amendment in 1971. The right of appeal is a substantive right and should be considered based on the law as it stood before the amendment. The court referred to the Supreme Court's decision in Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh, which held that an amendment placing a substantial restriction on the right of appeal does not affect proceedings initiated before the amendment.

3. The legal effect of depositing the full tax during the pendency of the appeal:
The assessee contended that the full tax was deposited while the appeal was still pending before the Assistant Commissioner, and therefore, the appeal should not have been dismissed without considering whether there was sufficient cause for the delay in making the deposit. The Tribunal rejected this contention, stating that the appeal's maintainability was irretrievably impaired due to the failure to deposit the admitted tax in time. However, the court disagreed, citing the Supreme Court's decision in Lalta Prasad Khinni Lal v. Assistant Commissioner (Judicial), Sales Tax, which held that an appeal could be entertained when proof of payment of admitted tax is furnished, subject to the condonation of delay by the appellate authority.

Conclusion:
The court found that the Tribunal's decision on the maintainability of the appeal was contrary to the law laid down in Commissioner of Sales Tax, U.P. v. Mangala Emporium, which held that the appeal is maintainable if no tax liability is factually admitted before the assessing officer. The Tribunal's reliance on Kanpur Vanaspati Stores was misplaced, as the decision supported the assessee's case. The court also held that the Tribunal's reasoning regarding the alternative contention was incorrect, as the appeal became entertainable upon the deposit of the full tax, and the assessee was entitled to seek condonation of delay under Section 9(6) of the Act.

Order:
The revision was allowed with costs, and the Tribunal was directed to pass an appropriate consequential order under Section 11(8) of the Act.