2015 (5) TMI 340 - HC - VAT and Sales Tax

Validity of order of Tribunal - Whether the Hon ble Tribunal has erred in deciding the appeal on merits despite the fact that the first appellate authority dismissed the appeal for failure to deposit the pre-deposit - Held that - In view of the catena of decisions of this Court and the subsequent recent decision of the Division Bench of this Court in the case of City Tiles Limited (2015 (2) TMI 838 - GUJARAT HIGH COURT), it was impermissible for the learned Tribunal to decide the appeals on merits when the appeals before the learned Tribunal were against the orders passed by the first Appellate Authority dismissing the appeals on the ground of non-deposit of the amount of pre-deposit. - Matter remanded back - Decided in favour of Reveue.

Summary

Issues Involved:
Appeal against common judgment and order passed by the Gujarat Value Added Tax Tribunal setting aside orders and demand raised by Excise Department. Questions of law raised include appeal dismissal for failure to deposit pre-deposit, assessment orders without application of mind, quashing reassessment order, deleting penalty levy, and interest deletion.

Analysis:

1. Appeal Dismissal for Failure to Deposit Pre-Deposit:
The appellant challenged the Tribunal's decision to decide the appeal on merits despite the first Appellate Authority dismissing the appeal for non-deposit of the pre-deposit amount. The Court proposed to remand the matters to the first Appellate Authority for consideration without insisting on pre-deposit. The substantial question of law focused on whether the Tribunal erred in deciding the appeal on merits under these circumstances.

2. Assessment Orders and Inquiry:
The appellant argued that the Tribunal erred in holding that assessment orders lacked application of mind and investigation of evidence. The Court emphasized the need for proper inquiry before passing orders based solely on notices issued by the Excise Department. The Tribunal's decision to set aside assessment orders without proper inquiry was highlighted.

3. Quashing Reassessment Order:
The issue of whether the Tribunal erred in quashing the reassessment order instead of remanding it to the assessing officer was raised. The Court underscored the importance of following due process and remanding matters to the appropriate authority for further action based on the evidence and legal requirements.

4. Penalty Levy and Interest Deletion:
The Tribunal's decision to delete the levy of penalty under Section 34(7) and 34(12) and to delete the interest was challenged. The Court considered the legality and justification of these deletions, emphasizing the need for a thorough review of the penalty and interest implications in the case.

5. Remand to First Appellate Authority:
Ultimately, the Court decided to remand the matters to the first Appellate Authority for a fresh consideration of the appeals in accordance with the law and on merits. The Court directed the Authority to decide the appeals without insisting on pre-deposit, emphasizing the importance of following proper legal procedures and conducting a thorough review of the case.

6. Conclusion:
Both appeals were allowed to the extent of quashing the Tribunal's judgment and remanding the matters to the first Appellate Authority. The Court stressed the need for a fair and thorough consideration of the appeals based on legal principles and evidence, with a directive for timely disposal of the appeals within three months. The cooperation of the respondent-dealer in the process was also emphasized.