2011 (4) TMI 1227 - HC - VAT and Sales Tax

Whether according to the provision of the SOD Act, it is the duty of the designated officer to verify whether the said dispute application has been filed after complying with the requirement of the Act and deposit of the payment prescribed under the Act? Held that - The designated authority under the SOD Act, committed a jurisdictional error in directing the appellant to deposit the amount which he has challenged in the appeal as not payble as condition of entertainment of the application under section 5 of the SOD Act. The Tribunal below also did not appreciate the aforesaid contention of the writ petitioner and erroneously affirmed the order passed by the designated authority. Thus set aside the order passed by the designated authority as well as the Tribunal below and direct the designated authority to consider the application for settlement of the dispute without insisting on deposit of any further amount by the writ petitioner as a condition for considering the merit of the application.

Summary

Issues:
1. Validity of order directing payment of interest by writ petitioner within a specified time period.
2. Compliance with the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 regarding the pending appeal.
3. Jurisdictional error by the designated authority in directing deposit of a disputed amount as a condition for settlement of dispute application.
4. Failure of the Tribunal to appreciate the writ petitioner's contention.

Analysis:
1. The High Court of Calcutta considered an application under Article 226 challenging an order passed by the West Bengal Taxation Tribunal, which directed the writ petitioner to make payment of interest within a specified time failing which the appeal would be deemed not entertainable. The Tribunal affirmed this order, leading to the writ petitioner's dissatisfaction and subsequent appeal.

2. The writ petitioner filed an appeal against the imposition of interest, challenging the amount assessed as not legally tenable. It was highlighted that all other amounts, apart from the disputed interest, had been paid. Subsequently, the writ petitioner applied under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999, fulfilling the necessary requirements and fee payments.

3. The designated officer under the Settlement of Dispute Act deemed the pending appeal invalid due to the writ petitioner's failure to deposit the "admitted amount" of interest. However, the Court ruled that the officer erred in directing the payment of the disputed amount as a condition for processing the settlement application. The Court emphasized that the petitioner's challenge to the amount in the appeal absolved them from the obligation to deposit the disputed sum.

4. The High Court found that both the designated authority and the Tribunal failed to appreciate the petitioner's argument regarding the disputed interest amount. Consequently, the Court set aside the orders of both bodies and directed the designated authority to consider the settlement application without requiring further deposit from the writ petitioner.

In conclusion, the Court allowed the writ application, emphasizing that the decision did not delve into the appeal's or settlement application's merits. It was clarified that the designated authority should handle the application in accordance with the law, and any decision on the dispute or appeal's merits would be within the respective authorities' purview. No costs were awarded in the given circumstances.