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2015 (5) TMI 172 - HC - VAT and Sales TaxValidity of Tribunal s order - Tribunal decided appeal on merits instead of dismissing it for non deposit of pre deposit order - Held that - Tribunal is bound to obey the decision of the High Court. It is not open for the learned tribunal to ignore the directions, observations or orders passed by the High Court. If instead of the learned tribunal any other person would have ignored the order passed by the High Court it would tantamount to Contempt of Court. However, we refrain ourselves from making any observations - Following decision of State of Gujarat Vs. Tudor India Ltd. 2015 (4) TMI 618 - GUJARAT HIGH COURT - Decided in favour of Revenue.
Issues Involved:
1. Whether the Hon'ble Tribunal erred in deciding the appeal on merits despite the first appellate authority dismissing the appeal for failure to deposit the predeposit? 2. Whether the Hon'ble Tribunal erred in holding that the assessment orders are without application of mind and without appreciating investigating the evidence? 3. Whether the Hon'ble Tribunal erred in quashing the assessment/reassessment order instead of remanding the assessment back to the file of the assessing officer? 4. Whether the Hon'ble Tribunal erred in deleting the levy of penalty under Section 34(7) and 34(12) of the Gujarat Value Added Tax Act, 2003? 5. Whether the Hon'ble Tribunal erred in deleting the interest? Detailed Analysis: 1. Deciding the Appeal on Merits Despite Non-Deposit of Predeposit: The primary grievance in the present Tax Appeals is that the Tribunal decided the appeals on merits, even though the appeals were against the orders of the First Appellate Authority which dismissed the appeals solely on the ground of non-deposit of the predeposit. The Tribunal should have focused on the legality and validity of the First Appellate Authority's orders regarding the predeposit. The Tribunal's action of deciding the appeals on merits without addressing the predeposit issue was deemed impermissible. This approach was previously deprecated by the Division Bench of the High Court in the case of State of Gujarat Vs. Tudor India Ltd., where it was held that the Tribunal should not bypass the predeposit requirement and decide the appeals on merits directly. 2. Assessment Orders Without Application of Mind: The Tribunal held that the assessment orders were issued without proper application of mind and without adequately investigating the evidence. However, the High Court did not delve into the merits of this issue, as the primary focus was on the procedural impropriety regarding the predeposit. 3. Quashing the Assessment/Reassessment Orders: The Tribunal quashed the assessment/reassessment orders instead of remanding the cases back to the assessing officer. The High Court emphasized that the Tribunal should have remanded the matters to the First Appellate Authority for a decision on the predeposit issue and subsequent merits, rather than quashing the orders outright. 4. Deleting the Levy of Penalty: The Tribunal deleted the penalties levied under Section 34(7) and 34(12) of the Gujarat Value Added Tax Act, 2003. The High Court did not specifically address the merits of this deletion, as the primary procedural issue regarding the predeposit needed resolution first. 5. Deleting the Interest: Similar to the penalty issue, the Tribunal's deletion of the interest was not specifically addressed on merits by the High Court. The focus remained on the procedural aspect concerning the predeposit. Conclusion: The High Court quashed and set aside the impugned judgment and orders passed by the Tribunal and remitted the matters back to the Tribunal. The Tribunal was directed to decide the appeals as if they were against the orders of the First Appellate Authority dismissing the appeals on the ground of non-deposit of the predeposit. The Tribunal was instructed to consider the legality and validity of the First Appellate Authority's orders regarding the predeposit and to refrain from deciding the appeals on merits without addressing the predeposit issue first. The Tax Appeals were allowed to the extent of this procedural correction.
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