1993 (2) TMI 285 - HC - VAT and Sales Tax

Summary

Issues:
- Appeal against assessment order under U.P. Sales Tax Act
- Requirement of deposit for maintaining an appeal under section 9 of the Act
- Discretion of appellate authority to waive or relax deposit requirement
- Financial stringency as grounds for waiver/relaxation of deposit
- Judicial considerations for waiver/relaxation of deposit
- Lack of reasons in the Sales Tax Tribunal's order
- Exercise of discretion by appellate authority
- Setting aside the Sales Tax Tribunal's order for fresh consideration

Analysis:
The judgment pertains to three connected sales tax revisions filed by a partnership firm against a common order passed by the Sales Tax Tribunal. The revisions relate to the assessment years 1984-85, 1985-86, and 1986-87. The firm, engaged in the manufacture and sale of bricks, did not file any return of its turnover for the respective years, leading to ex parte assessments. The firm appealed these assessments, seeking waiver of the condition of pre-deposit of twenty percent of the assessed tax as required by section 9(1-B)(b) of the U.P. Sales Tax Act.

The appellate authority rejected the applications for waiver, prompting the firm to approach the Sales Tax Tribunal. The Tribunal, without providing reasons, dismissed the appeals, despite the firm's claim of financial hardship and lack of assets to make the required deposit. The Tribunal overlooked crucial details, such as the partners' financial state as per their affidavits, and made assumptions without proper investigation. The Tribunal's order lacked justification and failed to consider relevant factors, including the quantum of disputed tax and the assessee's capacity to pay.

Citing precedents, the High Court emphasized that the appellate authority's discretion to waive or relax the deposit requirement must be exercised judiciously and objectively. The Court noted that the Tribunal's decision lacked proper reasoning and directed a fresh consideration of the appeals. The Court highlighted the need for a fair and rational approach in dealing with waiver requests, ensuring that the matter is handled equitably and in accordance with the law.

Ultimately, the High Court set aside the Sales Tax Tribunal's order, instructing the Tribunal to re-examine the appeals in light of the observations made. The revisions were partially allowed, with no costs imposed. The judgment underscores the importance of a reasoned and fair assessment of waiver requests, emphasizing the need for a balanced and objective exercise of discretion by the appellate authority.