2019 (11) TMI 1430 - HC - VAT and Sales Tax

Vires of section 79(5) of the Assam Value Added Tax Act 2003 - stay reduce or waive off pre-deposit - HELD THAT - The import and effect of the judgment rendered by the Hon ble Supreme Court of India in is that in case the requirement of pre-deposit is found to be arbitrary and exorbitant only then the Writ Court would interfere - Considering the law laid down by the Hon ble Supreme Court of India portion of which has been extracted herein above we are of the considered view that paucity of funds available with the petitioner would not per-se be a ground for interference in this regard in peculiar facts and circumstances of this case particularly because statutory provision requires a pre-deposit of 25%. It is deemed just and proper to give liberty to the petitioner to make the deposit in terms of Section 79(5) of the Act of 2003 within 60(sixty) days from today. On such deposit the appeal shall be heard by the Appellate forum.

Summary

Issues:
Challenge to the vires of Section 79(5) of the Assam Value Added Tax Act, 2003 regarding pre-deposit requirement for hearing appeals.

Analysis:
The petitioner, a limited liability partnership firm, filed a writ petition challenging Section 79(5) of the Act, which mandates a 25% pre-deposit for entertaining appeals. The petitioner sought to quash an order by the Deputy Commissioner of Taxes and declare the section unconstitutional. The petitioner argued financial inability to make the deposit and requested a waiver. The court noted the Hon'ble Supreme Court's decision in M/s Technimont Private Limited case, which upheld the pre-deposit provision. The Supreme Court addressed the issues of the pre-deposit condition being onerous and the authority's power to grant interim protection against it. The court referred to past cases where similar provisions were upheld, emphasizing that taxing statutes are to be construed strictly without considering hardship. The court held that the pre-deposit requirement is not violative of Article 14 of the Constitution.

The court rejected the petitioner's argument that financial constraints should warrant a waiver, stating that interference is only justified if the pre-deposit is found to be arbitrary or exorbitant. The court emphasized that the statutory provision mandates the pre-deposit and financial difficulties alone are not sufficient grounds for interference. The petitioner's plea for equity was considered, and the court extended the deadline for the deposit to 60 days, allowing the appeal to proceed upon compliance with the pre-deposit requirement.

In conclusion, the court disposed of the writ petition, upholding the validity of Section 79(5) of the Assam Value Added Tax Act, 2003, and granting the petitioner 60 days to make the required pre-deposit for the appeal to be heard by the Appellate forum.