2015 (12) TMI 1627 - HC - VAT and Sales Tax

Natural justice - ex-parte decision - validity of order of Tribunal - pre-deposit - the assessment orders were passed by the Assessing Officer in absence of representative of appellant since there were some internal disputes between them. Be that as it may, assessment was made ex-parte. The Commissioner (Appeals) had dismissed the appeal because appellant was unable to deposit the entire amount of tax with interest by way of pre-deposit - Held that - we would have wished the Tribunal had not made such strong observations in a pre-deposit matter when various issues were never considered by the Commissioner (Appeals) and were not directly at issue before the Tribunal - considering the fact that the assessment proceedings were framed ex-parte and question is of pre-deposit at first appellate stage, we direct the appellant to deposit sum of ₹ 5 lacs with the department by way of pre-deposit latest by 15.1.2016, upon which, the appeals would be entertained by the Commissioner on merits being uninfluenced by observations of the Tribunal in the impugned judgement - order of Tribunal reversed - appeal allowed - decided in favor of assessee.

Summary

Issues:
Appeal against order of pre-deposit made by Commissioner (Appeals) - Tribunal dismissing appeals - Observations made by Tribunal - Assessment orders passed ex-parte - Appellant's inability to deposit entire amount of tax with interest - Genuineness of transactions - Strong observations by Tribunal - Reversal of Tribunal and Commissioner (Appeals) orders.

Analysis:
The appeals arose from a common order of the Tribunal dated 29.7.2015, where the appellant's appeals against the order of pre-deposit by the Commissioner (Appeals) were dismissed. The Commissioner (Appeals) had required the appellant to deposit the entire amount of duty with interest for all three years to entertain the appeals on merits. The Tribunal affirmed this decision, stating that the appellant should not be given a chance to delay proceedings or defraud the Government revenue. The Tribunal found no merit in the appellant's submissions, dismissing the appeals at the admission stage itself. The Tribunal also noted that no penalty had been levied by the Assessing Officer during provisional assessments, providing relief to the appellant if the pre-deposit amount was paid.

The appellant's counsel argued that the assessment orders were passed ex-parte due to internal disputes, and the appellant was unable to deposit the full tax amount with interest as required by the Commissioner (Appeals). The appellant tried to demonstrate the genuineness of transactions, but the Tribunal viewed it as an attempt to delay proceedings and defraud the revenue. The High Court expressed a wish that the Tribunal had not made such strong observations in a pre-deposit matter where various issues were not directly at issue.

Considering the ex-parte nature of the assessment proceedings and the pre-deposit requirement at the first appellate stage, the High Court directed the appellant to deposit a specified sum with the department by a certain date to entertain the appeals on merits without being influenced by the Tribunal's observations. The High Court reversed the orders of both the Tribunal and the Commissioner (Appeals) for this purpose, disposing of all the Tax Appeals involved in the case.