2014 (9) TMI 718 - HC - VAT and Sales Tax

Withdrawal of application - Whether, in the facts and under the circumstances of the case, the Gujarat Value Added Tax Tribunal was right in law and on facts in deciding the appeal on merits when the Deputy Commissioner (Appeals) had not decided the appeal on merits but dismissing it only for nonpayment of pre-deposit - Held that - Appellant-Dealer, seeks permission to withdraw the present Tax Appeal with a liberty to approach the learned Tribunal by way of Rectification Application and to point out before the learned Tribunal that there was sufficient material / evidence on record to show that there was actual movement of goods on which Input Tax Credit was sought - when such an application is submitted pointing out the mistakes, if any, out of the material / evidence which are already on record with the Paper Book, same be considered by the learned Tribunal in accordance with law and on merits, as we have expressed no opinion on merits of the matter - withdraw of application allowed.

Issues:
1. Appeal against the judgment and order of the Gujarat Value Added Tax Tribunal.
2. Validity of the Tribunal's decision on merits despite non-decision by Deputy Commissioner.
3. Allegations of violation of principles of natural justice and failure to consider documentary evidence.
4. Entitlement to input tax credit and ab initio cancellation of vendor's registration.
5. Penalty levied by assessing officer.
6. Denial of input tax credit due to non-payment of tax by the dealer.
7. Applicability of previous judgments by Gujarat High Court and Supreme Court.

Analysis:
1. The appellant challenged the Tribunal's decision in the Tax Appeal, questioning the Tribunal's right to decide on merits without the Deputy Commissioner's decision and alleging violations of natural justice principles.
2. The Tribunal's order was criticized for failing to consider the grounds challenging natural justice violations, not applying relevant legal principles, and denying input tax credit based on suspicion without proper investigation.
3. The appellant argued that the Tribunal did not consider documentary evidence, including valid purchase transactions with registered vendors and payment through account payee cheques.
4. The issue of entitlement to input tax credit under section 11 due to the ab initio cancellation of the vendor's registration was raised.
5. The Tribunal's decision not to delete the penalty imposed by the assessing officer was also contested in the appeal.
6. The appellant questioned the denial of input tax credit based on non-payment of tax by the dealer, especially in the absence of a retrospective amendment to the relevant section.
7. The appellant further challenged the Tribunal's failure to follow and discuss previous judgments by the Gujarat High Court and the Supreme Court in similar cases, questioning their inapplicability to the present case.

The Division Bench of the High Court noted that the issues raised were similar to a previous decision involving "M/S. MADHAV STEEL CORPORATION VS. STATE OF GUJARAT." The appellant sought to withdraw the Tax Appeal to approach the Tribunal for rectification, emphasizing the evidence of actual movement of goods supporting the claim for Input Tax Credit. The Court permitted the withdrawal of the appeal with liberty to file a rectification application, ensuring that the evidence already on record would be considered by the Tribunal in accordance with the law. The Court refrained from expressing any opinion on the merits of the case, disposing of the Tax Appeal with the mentioned observations and discharging the notice.

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