2014 (8) TMI 930 - HC - VAT and Sales Tax

Waiver of pre deposit - Held that - First Appellate Authority has dismissed the appeal preferred by the appellant on the ground of noncompliance of the order of predeposit and even the learned Tribunal has also dismissed the appeal solely on the ground of nondeposit of the amount of predeposit i.e. 20% of the total tax liability i.e. ₹ 12,08,755/- and in the facts and circumstances of the case considering the financial hardship pleaded by the appellant and so that the appeal preferred by the appellant is considered by the first Appellate Authority on merits, we are of the opinion that if the appellant is directed to deposit a total sum of ₹ 7,50,000/- as predeposit and on that the appeal preferred by the appellant is directed to be decided and disposed of by the first Appellate Authority on merits, it will meet the ends of justice - It goes without saying that if the appellant does not deposit the amount of predeposit within a period of six weeks, the necessary consequences shall follow and the learned first Appellate Authority need not decide the appeal on merits. - Decided conditionally in favour of assessee.

Summary

Issues Involved:
1. Appeal against nonpayment of pre-deposit amount of tax demand
2. Dismissal of appeal by the Tribunal for noncompliance with pre-deposit order
3. Financial hardship of the appellant

Analysis:

Issue 1: Appeal against nonpayment of pre-deposit amount of tax demand
The appellant challenged the order of the Gujarat Value Added Tax Tribunal, which dismissed the appeal due to nonpayment of a pre-deposit amount of 60% of the tax demanded. The appellant had initially deposited only a partial amount, leading to the dismissal of the appeal by the first Appellate Authority solely based on noncompliance with the pre-deposit requirement.

Issue 2: Dismissal of appeal by the Tribunal for noncompliance with pre-deposit order
The Tribunal insisted on a pre-deposit of 60% of the tax demand, which the appellant failed to comply with, resulting in the dismissal of the appeal. The appellant argued that the confirmed demand by the Assessing Officer was unjust and highlighted their financial difficulties, including age, health issues, and poor financial condition, which prevented them from making the full pre-deposit.

Issue 3: Financial hardship of the appellant
The appellant, aged 72 and suffering from health issues, pleaded their inability to pay the full pre-deposit amount. They cited the closure of their business due to health reasons, residing in a rented premises since their house collapsed, and the inability to afford the demanded amount. The respondent emphasized the need to consider the interests of the Revenue while requesting an appropriate order.

The High Court acknowledged the financial hardship faced by the appellant and allowed the appeal in part. The Court set aside the orders of the Tribunal and the first Appellate Authority, remanding the matter to the first Appellate Authority for a decision on merits. The Court directed the appellant to deposit a reduced sum of Rs. 7,50,000 as a pre-deposit within six weeks to proceed with the appeal. Failure to comply within the specified time would lead to necessary consequences, and the appeal would not be decided on merits. The Court granted relief to the appellant considering their circumstances, ensuring justice while maintaining the interests of the Revenue.