2015 (5) TMI 946 - HC - VAT and Sales Tax

Waiver of pre deposit - Validity of order passed by Tribunal - Tribunal directed the first appellate authority to disposed of the matter in the light of decision in the case of ONGC within 3 months - Held that - State of Gujarat brought it to the notice of the learned Tribunal that the decision of the learned Tribunal in the case of ONGC is challenged before the High Court and the High Court has admitted the appeals and the appeals are pending for final disposal and therefore, the High Court is seized with the matter. Despite the aforesaid brought to the notice of the learned Tribunal, the learned Tribunal not only dismissed the said applications by not removing the outer time limit fixed by it directing the first appellate authority to decide the appeals within a period of three months after following its earlier decision in the case of ONGC Limited, reiterated again and directed the first appellate authority to decide the appeals within stipulated time after following its decision in the case of ONGC Limited. Once it was brought to the notice of the learned Tribunal that the appeals against its decision in the case of ONGC Limited are pending before this Court and this Court is seized with the matter, even to avoid any further multiplicity of proceedings, the learned Tribunal could not have insisted for disposing of the appeals by the first appellate authority following its earlier decision in the case of ONGC Limited, which are the subject matter of appeals before this Court and that too within stipulated period - respondent - original appellant has stated at bar that he has no objection, if that part of the order, by which the learned Tribunal has directed the first appellate authority to decide the appeals within three months and that too after following the decision of the Tribunal in the case of ONGC Limited is quashed and set aside. If the respondent - original appellant is permitted to withdraw the amount, which the respondent - original appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013 i.e. ₹ 18,69,75,730/- on furnishing unconditional and irrevocable Bank Guarantee of the like amount in the name of the Commissioner of Commercial Tax, it will make the ends of justice and it will protect the interest of both the parties. - Decided partly in favour of Revenue.

Summary

Issues Involved:
1. Legality of the Value Added Tax Tribunal's order directing the first appellate authority to decide appeals within three months following the ONGC Limited decision.
2. Direction to refund the amount deposited by the respondent with 18% interest.
3. Respondent's willingness to furnish a Bank Guarantee for the deposited amount.

Detailed Analysis:

Legality of the Tribunal's Order:
The appeals challenged the Tribunal's direction to the first appellate authority to decide the appeals within three months and to follow the Tribunal's earlier decision in the ONGC Limited case. The Tribunal's insistence on this direction despite being aware that the ONGC Limited decision was under appeal before the High Court was deemed inappropriate. The High Court noted that the Tribunal should have remanded the matter without such specific directions to avoid multiplicity of proceedings. The High Court emphasized that the first appellate authority should wait for the High Court's decision on the ONGC Limited appeals to ensure consistency and avoid unnecessary litigation.

Direction to Refund the Amount with 18% Interest:
The Tribunal's order directing the State to refund the amount deposited by the respondent with 18% interest was found to be beyond the Tribunal's powers. The High Court observed that such a direction was unjustifiable and perverse, especially given the pending appeals. The High Court highlighted that the Tribunal should not have issued this order in the Miscellaneous Applications preferred by the State.

Respondent's Willingness to Furnish a Bank Guarantee:
The respondent expressed willingness to furnish an unconditional and irrevocable Bank Guarantee for the amount deposited. The High Court found this suggestion reasonable and directed that the respondent be allowed to withdraw the deposited amount upon furnishing the Bank Guarantee. This approach was seen as balancing the interests of both parties.

Conclusion:
The High Court quashed the Tribunal's directions for the first appellate authority to decide the appeals within three months following the ONGC Limited decision. It also set aside the order directing the refund of the deposited amount with 18% interest. Instead, the High Court allowed the respondent to withdraw the deposited amount upon providing a Bank Guarantee of the same amount. The first appellate authority was instructed to decide the appeals after the High Court's decision in the ONGC Limited case to avoid further multiplicity of proceedings.