2000 (7) TMI 950 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the appellate authority can impose the condition of furnishing a surety bond while entertaining an appeal under section 39(1) of the Haryana General Sales Tax Act, 1973?

Analysis:
The judgment of the High Court addressed the issue of whether the appellate authority can impose the condition of furnishing a surety bond when entertaining an appeal under section 39(1) of the Haryana General Sales Tax Act, 1973. The petitioner challenged an order requiring payment of tax for a specific year and filed an appeal under section 39(1) of the Act. The Joint Excise and Taxation Commissioner (Appeals) accepted the appeal subject to the condition of furnishing a surety bond, which the petitioner contested. The Tribunal upheld the condition, leading to the present legal challenge.

The Court analyzed the relevant provisions of section 39 of the Act, particularly sub-section (5) which outlines the conditions for entertaining an appeal. The first part of the proviso to sub-section (5) allows the appellate authority to entertain an appeal without insisting on the deposit of tax if satisfied that the appellant is unable to pay the full amount. The second part empowers the authority to stay recovery subject to providing a bank guarantee or adequate security.

The Court held that the appellate authority can impose conditions under the first part of the proviso only if satisfied that the appellant cannot pay the full amount. The language of the proviso does not restrict the authority from imposing conditions like furnishing a surety bond. The Tribunal's view on the mandatory requirement of a bank guarantee was deemed incorrect. The Court emphasized the need for the appellate authority to exercise discretion based on individual case facts rather than applying a uniform rule on furnishing a surety bond.

Furthermore, the Court agreed that the petitioner should have been given an opportunity to demonstrate its inability to furnish the surety bond before imposing such a condition. The failure to provide this opportunity was seen as a violation of natural justice. Consequently, the Court allowed the writ petition, quashing the previous orders and directing the appellate authority to reconsider the application under the proviso within two months.

In conclusion, the Court emphasized the importance of providing reasoned decisions and ensuring the application of statutory conditions when exercising powers under the proviso. The judgment highlighted the need for the appellate authority to consider individual circumstances and afford parties the opportunity to present evidence before imposing conditions like furnishing a surety bond.