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2016 (6) TMI 1190 - HC - VAT and Sales TaxDismissal of appeal - non-compliance with condition of pre-deposit - Held that - the appellant is at first appellate stage, insistence of the appellate authority and the Tribunal, for the assessee to deposit a total of ₹ 2.66 crores which roughly exceeds 40% of the tax, interest and penalty liabilities was extremely harsh. Coupled with the fact that the assessee s immovable property under attachment secures the Government dues, we modify the pre-deposit condition by requiring the appellant to deposit 15% of the total principal tax liability for both years under both cases - appeal allowed in part.
Issues:
Challenge to order imposing pre-deposit condition by Value Added Tax Tribunal. Analysis: The appellant challenged a common order passed by the Value Added Tax Tribunal, which upheld the decision of the first appellate authority to impose a pre-deposit condition. The Tribunal granted one last opportunity to satisfy the condition. The first appellate authority had imposed a pre-deposit condition of 2.66 crores, which was confirmed by the Tribunal. However, the principal liability of VAT and CST for the relevant assessment years was substantially lesser, without considering interest and penalty. The appellant's immovable property valued at around 11 crores was under attachment by the department. Partners of the firm provided an undertaking stating the property was free from encumbrances. Considering the appellant was at the first appellate stage, the requirement to deposit over 40% of the tax, interest, and penalty liabilities was deemed extremely harsh. Given that the immovable property secured the government dues, the court modified the pre-deposit condition to 15% of the total principal tax liability for both years, excluding interest and penalty. This amount was to be deposited by a specified date, after which the first appellate authority would hear the appeals on their merits. Consequently, the orders related to the pre-deposit condition, dismissal of the appeal, and the Tribunal's decision were quashed. The attachment of the immovable property was to continue until the first appeals were decided, with restrictions on its sale, transfer, or encumbrance. The tax appeals and civil applications were disposed of by the court.
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