2015 (11) TMI 1606 - HC - VAT and Sales Tax

Pre-deposit - relief sought by way of waiver of pre-deposit - Held that - It is clear from the documents and balance-sheet available on record that the financial condition of the petitioner is precarious and the petitioner, as indicated herein above, does not have the financial capacity to deposit 10% of ₹ 15,01,747/-, i.e. the penalty amount. That being so and considering the financial condition of the petitioner, as indicated herein above, interest of justice requires that an opportunity of hearing of the appeal on merit should be granted to the petitioner and to ventilate the grievance before the appellate authority and for non-deposit of pre-deposit of amount the appeal should not be dismissed as it would frustrate the right of the petitioner to prosecute the appeal before the appellate authority and may cause great injustice to the petitioner - That being so, we allow this petition and grant exemption in the matter of deposit of 10% of the penalty amount. The appellate authority is directed to proceed and decide the appeal in accordance to law without insisting upon deposit of 10% of the penalty amount. Till the appeal is not decided, no coercive steps for recovery of penalty amount shall be initiated by the authority. With the aforesaid, the writ petition stands disposed of.

Summary

Issues:

1. Relief sought by the petitioner under Clause 7.5 of para 7.0 of the petition.
2. Exemption from payment of penalty under M.P. VAT Act and entry tax.
3. Financial condition of the petitioner affecting the ability to deposit 10% of the penalty amount.
4. Jurisdiction of the appellate authority to grant exemption in pre-deposit matters.
5. Granting relief to the petitioner to proceed with the appeal without depositing the penalty amount.

Analysis:

The judgment primarily deals with the petitioner seeking relief under Clause 7.5 of para 7.0 of the petition, specifically requesting exemption from paying penalties under the M.P. VAT Act and entry tax. The petitioner, through their Counsel, highlighted the financial hardship, indicating the closure of their establishment and inability to deposit 10% of the penalty amount, which was substantial. The Counsel argued that the imposition of the penalty was unjustifiable given the circumstances.

Regarding the jurisdiction of the appellate authority to grant exemption in pre-deposit matters, the petitioner contended that only the Court, under Article 226 of the Constitution of India, could provide such relief. The Government Advocate acknowledged that the matter could be considered by the appellate authority but emphasized the Court's exclusive power in this regard.

After considering the submissions, the Court observed the precarious financial condition of the petitioner and acknowledged their inability to deposit the penalty amount. In the interest of justice and to prevent injustice, the Court granted exemption from depositing 10% of the penalty, allowing the petitioner to proceed with the appeal without facing coercive recovery measures until the appeal's final decision. The judgment disposed of the writ petition in favor of the petitioner, directing the appellate authority to decide the appeal in accordance with the law without insisting on the penalty deposit.