2015 (4) TMI 1081 - HC - VAT and Sales Tax

Validity of Tribunal order - Not passed on the ground on which First Appellate Authority dismissed the appeal but considered the appeal on merits - First Appellate Authority dismissed the appeal on the ground of non-deposit of the amount of pre-deposit - Held that - by considering the fact that even subsequently when on remand by the Division Bench of this Court in the case of State of Gujarat V/s. City Tiles Limited 2015 (2) TMI 838 - GUJARAT HIGH COURT the matters are remanded to the file of the first Appellate Authority with a direction to the first Appellate Authority to decide and dispose of the appeals in accordance with law and on merits and in the facts and circumstances of the case without insisting for pre-deposit. - Decided in favour of appellant

Summary

Issues:
1. Appeal against the judgment of the Gujarat Value Added Tax Tribunal.
2. Decision on merits despite the first appellate authority dismissing the appeal for failure to deposit pre-deposit.
3. Quashing of reassessment order by the Tribunal.
4. Deletion of penalty under Section 34(7) and 34(12) by the Tribunal.
5. Deletion of interest by the Tribunal.

Issue 1: Appeal against the Tribunal's judgment
The appellant, State of Gujarat, challenged the judgment of the Gujarat Value Added Tax Tribunal, Ahmedabad, dated 23.10.2013, which allowed the appeals and set aside the orders passed by the authorities below based on a show cause notice by the Excise Department. The appellant raised questions of law regarding the Tribunal's decision.

Issue 2: Decision on merits despite non-deposit of pre-deposit
The High Court proposed to remand the matters to the first Appellate Authority to consider the appeals on merits without insisting on pre-deposit. The Court restricted the appeals to the question of whether the Tribunal erred in deciding the appeal on merits despite the first appellate authority dismissing the appeal for failure to deposit pre-deposit.

Issue 3: Quashing of reassessment order
The Tribunal had quashed the assessment orders, citing lack of inquiry and reliance solely on the notice issued by the Excise Department. However, the appeals before the Tribunal were against the first Appellate Authority's dismissal due to non-deposit of pre-deposit, not on the merits of the case.

Issue 4: Deletion of penalty by the Tribunal
The Tribunal deleted the levy of penalties under Section 34(7) and 34(12). The Court found it impermissible for the Tribunal to decide on merits when the appeals were against the first Appellate Authority's dismissal due to non-deposit of pre-deposit.

Issue 5: Deletion of interest by the Tribunal
The Tribunal also deleted the interest. The High Court remanded the matters to the first Appellate Authority to decide the appeals on merits without insisting on pre-deposit, emphasizing compliance with legal procedures and considerations.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the High Court's decision to remand the matters to the first Appellate Authority for a proper consideration of the appeals on their merits.