2015 (3) TMI 390 - HC - VAT and Sales Tax

Waiver of pre-deposit - Hawala dealer or genuine businessman - Dealer declared as such by referring to a list which has been published on the website of the department listing certain dealers and some transactions - Order of pre deposit - Mismatch of documents - Lack of opportunity - Held that - If the proof has been produced and not looked into or the documents are rejected without any application of mind, then the Tribunal will definitely look into this grievance of the petitioner. We have no doubt in our mind that merely because the basic tax is secured by deposit, the petitioner will not get adequate and reasonable opportunity to prove its case. - It is the Tribunal's prima facie finding and which will definitely not bind it when it hears the appeal on merits. All that we hold is that if the prima facie finding is that there was a mismatch in the documents then prima facie they have been looked into and that prima facie conclusion reached is not to the satisfaction of the petitioner, will not enable it to claim total dispensation of the condition of pre deposit of the tax liability and to claim an unconditional stay of recovery pending appeal. The appeal is the second appeal now. The appeal against conditional order right upto the Tribunal and now a writ petition in this Court is only prolonging the compliance with the condition. We have no doubt in our mind that if the First Appellate Authority is furnished proof of compliance with the above condition, it will decide the appeal uninfluenced by any prima facie conclusions and tentative findings. - This will be done on the basis of pre deposit - Decided conditionally in favour of assessee.

Summary

Issues:
1. Validity of the order passed by the Maharashtra Sales Tax Tribunal.
2. Allegations of hawala transactions against the petitioner.
3. Lack of opportunity for the petitioner to clarify transactions.
4. Prima facie findings of the Tribunal regarding mismatch in documents.
5. Requirement of pre-deposit of tax liability for stay of recovery proceedings pending appeal.
6. Discretionary interference in writ jurisdiction.

Analysis:

1. The petitioner sought a writ of certiorari against the order passed by the Maharashtra Sales Tax Tribunal, challenging the assessment order withdrawing a set-off and determining a tax liability of Rs. 1,24,071 for the period 2009-2010. The First Appellate Authority directed the petitioner to deposit the basic tax liability as a pre-condition for granting a stay of recovery proceedings pending appeal.

2. The petitioner contended that the department labeled them as a hawala dealer based on a list published on the department's website without conducting an independent inquiry or providing an opportunity to clarify transactions. However, the Tribunal found prima facie evidence of a hawala transaction and a mismatch in documents, indicating a lack of opportunity for the petitioner to explain the purchases made from the dealers listed as hawala dealers.

3. The petitioner argued that they had produced documents to clarify transactions, but the officer did not consider them. The Court refrained from expressing an opinion on this contention at the interim stage to avoid prejudice. The Tribunal's prima facie finding on the mismatch in documents would not bind them during the appeal on merits.

4. Despite the petitioner's compliance with the pre-deposit condition, the Court emphasized that the First Appellate Authority should decide the appeal on merits without being influenced by any prima facie conclusions. The Court dismissed the writ petition, highlighting that interference in writ jurisdiction is discretionary and equitable.

5. If the petitioner complies with the pre-deposit condition within four weeks and provides proof of deposit, the First Appellate Authority should decide the appeal expeditiously, without being influenced by any prior findings. The Authority is directed to dispose of the appeal within three months from the date of compliance.