2015 (4) TMI 1091 - HC - VAT and Sales Tax

Rejection of appeal - 12.5% of the disputed tax was made beyond the prescribed period of 60 days from the date of receipt of a copy of the assessment order - Petitioner within the stipulated time-limit of 60 days from the date of receipt of a copy of the assessment order filed proof of payment by issuing cheque representing 12.5% of the disputed tax and also immediately paid 12.5% of the disputed tax by way of demand draft when cheque was dishonoured which is in continuation of the cheque issued by him within 60 days time - Held that - As it is conceded that the appeal is substantive remedy to the aggrieved party and having regard to the fact that within the timeframe, the petitioner has issued cheque and that he has complied with the notice of the respondents by making payment by way of demand draft, the respondents are directed to treat such payment to have been made within the time-frame of 60 days as contemplated under law. - Matter remanded back

Summary

Issues:
1. Disallowance of input tax credit by assessing authority.
2. Rejection of appeal by appellate authority due to delayed payment of disputed tax.
3. Interpretation of time limit for payment under the APVAT Act.

Analysis:
1. The petitioner, a registered dealer under the APVAT Act, was engaged in the business of Gypsum Galvanised Plain corrugated column sheets. The assessing authority disallowed the input tax credit claimed by the petitioner, resulting in a tax payable of Rs. 18,17,094. The petitioner filed an appeal within the stipulated time as required by law.

2. The petitioner issued a cheque for 12.5% of the disputed tax along with the appeal, but it was dishonored due to insufficient funds. Subsequently, the petitioner paid the amount by way of a demand draft. The appellate authority rejected the appeal on the grounds that the payment was made beyond the prescribed period of 60 days from the receipt of the assessment order.

3. The petitioner argued that the payment by demand draft was in continuation of the cheque issued within the 60-day timeframe, even though the demand draft was issued after 87 days. The court considered the peculiar facts and circumstances of the case and held that the payment made by demand draft should be considered within the 60-day timeframe as intended by the law. The court distinguished the present case from a previous judgment and directed the appellate authority to reconsider the appeal on its merits.

Conclusion:
The High Court allowed the writ petition, setting aside the appellate authority's order and remanding the matter for fresh consideration. The court emphasized the importance of the appeal as a substantive remedy for the petitioner and directed the authorities to treat the payment as made within the prescribed 60-day period. The miscellaneous petitions were closed, and no costs were awarded.