2010 (11) TMI 881 - HC - VAT and Sales Tax

Summary

Issues:
1. Disputed tax liability on disclosed turnover.
2. Jurisdictional error by Tribunal in considering merits of the case.

Analysis:
1. The applicant, engaged in brick manufacturing, opted for a compounding scheme for a specific period but did not opt for it in the subsequent period, leading to a regular assessment. The assessing authority estimated the taxable turnover at Rs. 16,69,800, contrary to the applicant's claim of exemption due to turnover being below the taxable limit of Rs. 49,100. The first appellate authority dismissed the appeal for non-payment of the admitted tax, and the Tribunal upheld this decision. However, the High Court found that the tax liability on the disclosed turnover of Rs. 49,100 was disputed, and the applicant had not admitted to it. The Court concluded that the matter required adjudication and could not be considered as admitted tax, leading to the revision being allowed.

2. The High Court observed that the Tribunal had erred in considering the merits of the case while upholding the first appellate authority's decision to dismiss the appeal for non-deposit of admitted tax. The Court emphasized that once the Tribunal upheld the dismissal on procedural grounds, it should not have delved into the substantive aspects of the case. The Court directed the Tribunal to exercise caution in such matters in the future. Consequently, the orders of the Tribunal and the first appellate authority were set aside, and the case was remanded for a fresh decision on the merits in accordance with the law.