2016 (1) TMI 379 - HC - VAT and Sales Tax

Waiver of pre deposit - Reduction of the amount of bank guarantee requirement to 20% of tax demand - Held that - As can be seen from the impugned order passed by the Tribunal, the learned Government Representative has not objected to the request made by the learned counsel for the respondent for directing the first appellate authority to decide the appeal in view of the deposit of 5% of the tax demand and furnishing of bank guarantee for 20% of the tax demand. Therefore, the Tribunal does not appear to have assigned any reasons for reducing the amount of pre-deposit. As regards the contention that the Tribunal has not examined the facts of the case from the aspect of financial hardship, as rightly pointed out by the learned counsel for the respondent, subsection (3) of section 73 of the Act does not contemplate financial hardship as one of the factors to be taken into consideration for the purpose of waiver of pre-deposit - it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity giving rise to any question of law, much less, a substantial question of law as proposed or otherwise. - Decided against Revenue.

Summary

Issues:
Reduction of pre-deposit amount and bank guarantee requirement by the Tribunal.

Analysis:
1. The appeal under section 78 of the Gujarat Value Added Tax Act, 2003 was filed by the State of Gujarat questioning the order passed by the Gujarat Value Added Tax Tribunal. The substantial questions of law proposed were related to the reduction of the pre-deposit amount and bank guarantee requirement by the Tribunal.

2. The facts of the case involved an assessment order raising a total demand of &8377;13,01,96,493/- against the respondent assessee for the financial year 2010-11. The Joint Commissioner of Commercial Tax directed the respondent to make a pre-deposit of 20% of the total demand and furnish a bank guarantee for the remaining amount as a condition for hearing the appeal.

3. The Tribunal, during the preliminary hearing, directed the respondent to pay 5% of the tax demand and furnish a bank guarantee of 20% of the tax demand within a specified period. The Tribunal further ordered the release of the attachment of the bank account upon payment and directed the continuation of the stay granted until the final disposal of the appeal.

4. The Tribunal allowed the appeal by setting aside the Joint Commissioner's order and stated that no further amount needed to be paid by the respondent due to the amount deposited and bank guarantee furnished. The Tribunal directed the Joint Commissioner to decide the appeal on merits within a specified period, considering a relevant decision in another case.

5. The appellant challenged the Tribunal's order, arguing that the Tribunal reduced the pre-deposit amount and bank guarantee without assigning any reasons or finding financial hardship. The respondent contended that the impugned order was just and legal, citing a previous court decision regarding the consideration of financial hardship.

6. The Tribunal did not object to the request to decide the appeal based on the deposit and bank guarantee furnished. It was noted that the Act does not require consideration of financial hardship for waiver of pre-deposit. Consequently, the Tribunal's order was found to be legally sound, and no substantial question of law was identified.

7. The appeal was dismissed as it failed to establish any legal infirmity in the Tribunal's order, and no substantial question of law was found to arise from the case.