2015 (4) TMI 618 - HC - VAT and Sales Tax

Reassessment of proceedings - Section 9 - Held that - Pursuant to search at the business premises of the Opponent, a show cause notice was issued for reassessment of the assessment of earlier years under section 9 (2) of the Central Act read with section 44 of the State Act - advocate appearing for the opponent was inquired about 20% of the pre-deposit of the total demand raised by the Deputy Commissioner of Commercial Tax, a request was made in writing to waive the amount of pre-deposit and it was insisted that the issue concerns branch transfer of the transactions. The Joint Commissioner of Commercial Tax also, in the impugned order, noted that the appellant is not desirous to make payment of pre-deposit and the request of waiver since was not acceptable - nothing has been stated on merits by the Joint Commissioner of Commercial Tax. What all he did is the rejection of the request made for waiver of pre-deposit by the opponent herein without touching anywhere the merits of the case. That being the case, when such order came to be challenged before the Tribunal, the Tribunal instead of addressing the issue of pre-deposit, has chosen to decide the matter on merits. - It is not the case of either side that an identical question of law was pending before the Tribunal in some other appeals concerning the very assessee, or identical question of law in respect of very assessee for different assessment year was before the Tribunal, and in such circumstances, with the consent of the parties it chose to conclude on merit. - Matter remanded back - Decided in favour of Revenue.

Summary

Issues:
1. Appeal against Tribunal's order quashing the order of the first appellate authority.
2. Dismissal of appeal on non-payment of pre-deposit.
3. Tribunal's decision to address the matter on merits instead of pre-deposit.

Analysis:
1. The Appellant State filed a Tax Appeal against the Tribunal's decision to set aside the order of the first appellate authority. The Tribunal quashed the order of confirmation of reassessment, stating that the Deputy Commissioner's order was not in accordance with the law. The Tribunal considered the transactions as branch transfers and relied on various authorities, including a Supreme Court case. The Appellant argued that the Tribunal erred in not appreciating the branch transfers as interstate trade. The High Court remanded the matter to the Tribunal for further review.

2. The first appellate authority dismissed the appeal due to non-payment of 20% of the total demand. The Appellant contended that the Tribunal should have considered the issue of pre-deposit instead of deciding on merits. The Opponent argued that the taxability of branch transfer transactions was covered by a Supreme Court decision. The High Court emphasized the importance of addressing the pre-deposit issue before deciding on the merits and remanded the case to the Tribunal for proper consideration.

3. The High Court noted a concerning trend where Tribunals decide on merits without addressing the issue of pre-deposit, depriving parties of appeal opportunities. Citing Supreme Court decisions, the Court highlighted the need to follow proper procedures and not bypass pre-deposit requirements. The High Court directed the Tribunal to focus on the pre-deposit issue first and then consider the merits in accordance with the law. Both parties were allowed to present their arguments during the re-adjudication. The appeal was disposed of without costs, ensuring no prejudice to either side's rights.