2014 (2) TMI 912 - HC - VAT and Sales Tax

Waiver of pre deposit - Earlier Tribunal suspended the requirement of pre-deposit of the disputed amount in entirety - Whether the appellant is entitled to refund or whether it should be the basis for grant of entire exemption from pre-deposit is not an aspect which can be stated as a position of law - Held that - Court is conscious of the fact that in the previous order relied upon, the Tribunal had directed suspension of the requirement of pre-deposit in entirety. In these peculiar circumstances, the impugned order is modified; instead of paying 20% of the amount of tax and interest, the appellant shall pay a reduced amount of 10% of tax and interest payable. The requirement of having to deposit 10% of penalty is hereby waived/cancelled - Time for pre deposit extended - Decided partly in favour of assessee.

Summary

Issues:
1. Appeal against DVAT Tribunal order for pre-deposit.
2. Contention of entitlement to refund.
3. Consideration of previous order for suspension of pre-deposit.
4. Modification of impugned order by High Court.

Analysis:

1. Appeal against DVAT Tribunal order for pre-deposit:
The High Court heard the appeal challenging the DVAT Tribunal's order directing pre-deposit of 20% of the tax, interest, and 10% of the penalty assessed. The appellant argued that the impugned order was erroneous in law and referred to a previous order where the Tribunal had suspended the requirement of pre-deposit completely. The appellant contended that since they were entitled to a refund, there should be no requirement for payment of tax or pre-deposit.

2. Contention of entitlement to refund:
The respondent disputed the appellant's claim of entitlement to a refund, stating that the previous order was based on different facts. The Revenue strongly argued before the Tribunal that there was no eligibility for a refund in the present case. The High Court considered these submissions and noted that the question of entitlement to a refund and its impact on pre-deposit cannot be determined as a matter of law. However, the Court acknowledged that the previous order had suspended the pre-deposit requirement entirely.

3. Consideration of previous order for suspension of pre-deposit:
Given the unique circumstances, the High Court modified the impugned order. Instead of the initial 20% pre-deposit requirement, the appellant was directed to pay a reduced amount of 10% of the tax and interest due. The necessity to deposit 10% of the penalty was waived or canceled. The Court extended the time for compliance with the modified directions by four weeks from the date of the order. The High Court recognized the significance of the previous order and adjusted the pre-deposit terms accordingly.

4. Modification of impugned order by High Court:
In conclusion, the High Court partially allowed the appeal by modifying the impugned order as mentioned above. The Court altered the pre-deposit percentages, reducing the amount required from the appellant and waiving the penalty deposit. The modified directions were to be complied with within the extended timeline. The appeal was partly allowed in the terms specified, and the order was directed to be issued accordingly.