2014 (10) TMI 1006 - HC - VAT and Sales Tax

Maintainability of appeal - non-compliance with the requirement of payment of 12.5% of the disputed sales tax - HELD THAT - A Division Bench of this Court, in Ankamma Trading Company 2011 (2) TMI 1254 - ANDHRA PRADESH HIGH COURT , held that payment of the admitted tax, and 12.5% of the disputed tax, beyond the period of sixty days, from the date of receipt of a copy of the order of the assessing authority, would disable the appellate authority from admitting the appeal. The power available to the Supreme Court under Article 142 of the Constitution of India, is not available to the High Court and, in the light of the judgment in Ankamma Trading Company1, this Court would not be justified in passing any order contrary thereto on sympathetic considerations - the reassessment order of the Commercial Tax Officer and the VAT returns, both of which form the basis for the petitioner s claim to have excess input tax credit, were passed and filed after the period of sixty days, for pre-deposit of the disputed sales tax of 12.5%, had expired. Petition dismissed.

Issues Involved:
1. Rejection of the petitioner's appeal due to non-payment of 12.5% of the disputed sales tax within the stipulated period.
2. Consideration of excess sales tax credit certificates as payment towards the disputed tax.
3. Application of precedents and the doctrine of stare decisis.
4. Jurisdictional limits of the High Court under Article 226 as compared to the Supreme Court's powers under Article 142.

Detailed Analysis:

1. Rejection of the petitioner's appeal due to non-payment of 12.5% of the disputed sales tax within the stipulated period:
The petitioner, a private limited company dealing in bullion, silver, and gold ornaments, challenged the order dated 31.12.2013 by the 2nd respondent rejecting the admission of their appeal for the tax period 2010-2011. The petitioner was required to deposit 12.5% of the disputed sales tax, amounting to Rs. 1,44,31,268/-, but paid only Rs. 9,30,756/-. The 2nd respondent rejected the appeal on the grounds of short payment, as the petitioner did not meet the 12.5% pre-deposit requirement within the sixty-day period as stipulated under Section 31 of the AP VAT Act.

2. Consideration of excess sales tax credit certificates as payment towards the disputed tax:
The petitioner argued that they possessed excess sales tax credit certificates amounting to Rs. 1,58,47,290/- which should be considered towards the 12.5% pre-deposit requirement. The petitioner submitted these certificates as proof of excess payment, but the 2nd respondent rejected the appeal, stating that the reassessment order and VAT returns forming the basis of the excess credit were filed after the sixty-day period had expired.

3. Application of precedents and the doctrine of stare decisis:
The court emphasized the binding nature of precedents, citing the Division Bench judgment in Ankamma Trading Company, which held that payment of the admitted tax and 12.5% of the disputed tax beyond the sixty-day period disables the appellate authority from admitting the appeal. The doctrine of stare decisis mandates adherence to former precedents to ensure consistency and certainty in judicial decisions. The court reiterated that decisions rendered by a Division Bench are binding on another Division Bench and that judicial discipline requires adherence to established precedents.

4. Jurisdictional limits of the High Court under Article 226 as compared to the Supreme Court's powers under Article 142:
The court noted that while the Supreme Court has the power under Article 142 to pass orders for complete justice, the High Court's jurisdiction under Article 226 is limited. The Supreme Court's direction in M/s. Ideal Detonators Pvt. Ltd. to revive the appeal and dispose of it on merits was issued under Article 142, which the High Court cannot emulate. The court also referenced the Division Bench's decision in Fytochem Formulations Ltd., which directed the Commercial Tax Officer to decide the petitioner's representation for excess tax credit, but clarified that this order did not consider the precedent set in Ankamma Trading Company and lacked detailed reasoning.

Conclusion:
The court found no infirmity in the 2nd respondent's order rejecting the appeal due to non-compliance with the pre-deposit requirement within the stipulated period. The court upheld the principle that judicial consistency and adherence to binding precedents are paramount. Consequently, the Writ Petition was dismissed, and no costs were awarded.

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