2003 (5) TMI 488 - HC - VAT and Sales Tax

Summary

Issues:
1. Dismissal of appeal due to non-deposit of additional demand.
2. Legal validity of conditions imposed for appeal under the Haryana General Sales Tax Act, 1973.
3. Interpretation of provisions regarding pre-deposit of tax amount for appeal.

Issue 1: Dismissal of appeal due to non-deposit of additional demand
The petitioner, a registered dealer under the Haryana General Sales Tax Act, challenged a demand created by the Excise and Taxation Officer. The appeal was dismissed for failure to deposit the additional demand as directed by the Joint Excise and Taxation Commissioner and subsequent non-compliance with the orders. The Sales Tax Tribunal upheld the dismissal, emphasizing the lack of challenge or compliance by the petitioner. The petitioner's review application was also dismissed by the Tribunal for failing to establish grounds for review under section 41 of the Act.

Issue 2: Legal validity of conditions imposed for appeal under the Haryana General Sales Tax Act, 1973
The Court referred to the judgment in Emerald International Ltd. v. State of Punjab, which upheld the constitutionality of section 39 of the Act and established key propositions regarding the right of appeal under the statute. It emphasized that the appeal is a statutory creation, and conditions imposed by the Legislature must be accepted for appeal. The Court clarified that the appellate authority can entertain an appeal without depositing the tax amount only if satisfied that the dealer is unable to pay, with reasons recorded in writing. It was highlighted that the legality of the tax assessed is not a relevant consideration for granting a stay.

Issue 3: Interpretation of provisions regarding pre-deposit of tax amount for appeal
Citing the Supreme Court's decision in State of Haryana v. Maruti Udyog Ltd., the Court reiterated the importance of complying with the conditions specified under section 39 of the Act for the maintainability of an appeal. The proviso allows the appellate authority to dispense with the deposit of the amount only upon proof of the appellant's inability to pay. The Court clarified that the term "unable" refers to the paying capacity of the person concerned, not their legal or actual liability to pay the demanded amount. Applying the principles from the aforementioned judgments, the Court held that the impugned orders did not have any legal infirmity and dismissed the writ petition.

In conclusion, the Court upheld the dismissal of the appeal due to non-compliance with the deposit requirements, emphasizing the statutory conditions for appeal under the Haryana General Sales Tax Act and the importance of establishing inability to pay as a basis for dispensing with the deposit.