2016 (2) TMI 1056 - HC - VAT and Sales Tax

Natural justice - waiver of pre-deposit - the TDS has been deducted, there is no liability and therefore, waiver should be granted, certificate of same has been produced now, which is not taken note of by the Tribunal - Held that - once the tax is found to be deducted at source and TDS Certificate issued indicates that nothing further has to be paid. If that be the position, even the pre deposit amount is not necessary - it is a fit case where the Appellate Authority should be directed to examine the appeal on merit and decide it in accordance to law - appeal allowed by way of remand.

Summary

Issues:
1. Rejection of appeal due to non-deposit of pre-waiver amount.
2. Dismissal of appeal for not submitting appropriate TDS Certificate.
3. Request for waiver of pre-deposit amount.
4. Interpretation of TDS Certificate as proof of tax payment.
5. Consideration of TDS Certificate availability in appeal assessment.

Analysis:
1. The petition challenges the order of the Appellate Authority dismissing the appeal under Section 46 of the M.P. VAT Act, 2002 due to non-deposit of the pre-waiver amount. The petitioner, an assessee, was denied credit for TDS due to the absence of appropriate TDS Certificate under Section 26A of the VAT Act. The appeal was rejected for not making the 10% pre-deposit, which was deemed a ground for dismissal.

2. The petitioner argued that despite TDS deductions, the Certificates were not available during assessment but have since been obtained. An application for waiver of the pre-deposit amount was made, contending that the TDS deduction discharged the tax liability. The rejection of the waiver without considering the availability of TDS Certificates was contested.

3. Citing a previous judgment, the petitioner's counsel asserted that if TDS is deducted and the Certificate issued, no further payment is required. The Court acknowledged the importance of TDS Certificates in determining tax liability and the necessity of examining the appeal on merit, especially when the Certificates are now available.

4. The Court noted that the only reason for assessing the petitioner was the absence of TDS Certificates, which are now on record. If the Certificates confirm tax payment, dismissing the appeal for non-deposit and taxing the already paid tax would be unjust. Thus, the Court directed the Appellate Authority to review the appeal based on the available TDS Certificate and without insisting on the pre-deposit amount.

5. Ultimately, the petition was allowed, the order of the Appellate Authority was quashed, and the matter was remanded for a merit-based decision without requiring the pre-deposit amount. The Court emphasized the significance of TDS Certificates in determining tax liability and ensuring a just outcome for the petitioner.