2009 (3) TMI 960 - HC - VAT and Sales Tax

Summary

Issues:
- Revision filed under section 41(1) of the Kerala General Sales Tax Act, 1963 against the Tribunal's order rejecting the appeal due to non-remittance of admitted tax before filing the appeal before the first appellate authority.

Analysis:
The High Court of Kerala considered a revision filed under section 41(1) of the Kerala General Sales Tax Act, 1963 against the order of the Tribunal. The Tribunal had rejected the appeal on the grounds that the petitioner had not remitted the admitted tax before filing the appeal before the first appellate authority. The court highlighted that a revision is provided under section 41(1) of the KGST Act only against orders of the Sales Tax Tribunal passed under section 39(4) or (7) of the Act. An order under section 39(4) is one issued on the merits disposing of the appeal by the Tribunal, while an order under sub-section (7) of section 39 is an order in a review application filed before the Tribunal by either party to review their appeal order. In this case, the petitioner had filed an appeal before the first appellate authority without paying the admitted tax, leading to the rejection of the appeal by the first appellate authority as not maintainable under the third proviso of section 34(1) of the Act.

The court emphasized that when an appeal is filed before the appellate authority, it is the duty of the appellate authority to verify the payment of admitted tax by the appellant to determine the maintainability of the appeal. The absence of an appeal provision to challenge an appellate authority's decision to not entertain an appeal due to non-payment of admitted tax was noted. The petitioner argued that there was a bona fide dispute about the payment of admitted tax since a revised return disputing the originally admitted tax was filed after admitting tax in the original return. However, the court highlighted that if a revised return is filed without bona fides to avoid paying admitted tax for the purpose of appealing, the appellate authority should decide the admitted tax and allow the assessee to pay it for genuine disputes to be entertained.

The court pointed out that since the appellate authority refused to pass an adjudication order on the payment dispute raised by the petitioner, the petitioner opted to file an appeal before the Tribunal, which was deemed not maintainable. The court clarified that when the appellate authority rejects an appeal as not maintainable due to non-payment of admitted tax, it does not constitute an order in appeal, and therefore, no further appeal lies to the Tribunal under section 39(1) of the Act. Consequently, the order of the Tribunal rejecting the appeal on the grounds of non-payment of admitted tax was not an order under section 39(4) or (7) of the Act, making it not subject to revision before the High Court under section 41(1) of the Act.

The court concluded by stating that the appropriate remedy for the petitioner in such a situation would have been to file a writ petition challenging the appellate authority's decision to reject the appeal. Consequently, the court rejected the revision as not maintainable under section 41(1) of the Act.