2020 (12) TMI 1341 - HC - VAT and Sales Tax

Maintainability of appeal - non-compliance with the requirement of pre-deposit - whether the appellate authority was right in rejecting the appeal of the petitioner for want of payment of 12.5% of the disputed tax? - HELD THAT - From a reading of the provisions of Section 31(1), 31(2) and 31(3)(a) of A.P. VAT Act, it is clear that any VAT dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed by Additional Commissioner or Joint Commissioner or Deputy Commissioner, may within 30 days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed. It is to be noted here that the word used is 'any order' passed and not 'order of assessment'. Hence, the argument of the learned Government Pleader that appeal itself may not lie cannot be accepted. The word 'any order' referred to in Section 31 cannot be limited to only assessment orders. If that was the intention of the Legislature, the same would have been incorporated therein. In the absence of the same, the endorsement made by the Assistant Commissioner on 21.11.2019 can be challenged in an appeal. Payment of 12.5% of the difference of tax assessed by the authority prescribed - HELD THAT - A reading of material placed before the Court does not show that the dispute or the lis between the parties was with regard to payment of any tax or collection of difference of tax or the penalty imposed therein. In fact, the Counsel for the petitioner submits that he is not disputing, at this stage, any tax liability or interest or penalty, but, his request before the authority, at this stage, is only to consider Form-H, which he has received at a belated stage. It is no doubt true that there is a delay in making an application before the authority concerned for accepting the Form-H, but, the request before the authority was only to receive Form-H, which he has received at a belated stage, but the same was rejected. The same does not relate to collection of tax or payment of tax as the assessment was complete and the same was not challenged - Further, the proviso categorically states that an appeal shall not be admitted by the appellate authority unless the dealer produced proof of payment of tax admitted to be due and proof of payment of 12.5% of difference of tax assessed by the authority prescribed and the tax admitted by the appellant for the relevant tax period in respect of which appeal is preferred. Here the appeal does not relate to imposing tax for the relevant tax period, but for a different purpose i.e., refusing to accept 'H' Form. Therefore, we are of the view that insisting on payment of 12.5% of difference of tax may not be proper. The impugned order is set aside, directing the 2nd respondent-Appellate Deputy Commissioner (CT), Tirupati, to entertain the appeal of the petitioner against the endorsement of the 1st respondent-Assistant Commissioner (ST), Ongole-I Circle, dated 21.11.2019 and deal with the appeal without insisting on payment of 12.5% of tax, in accordance with the law - Petition allowed.

Summary

Issues:
Challenge to rejection of appeal for non-payment of disputed tax amount.

Analysis:
The writ petition was filed to challenge the rejection of the appeal by the 2nd respondent for the Assessment Year 2012-2013 under the Central Sales Tax Act, citing the petitioner's failure to pay 12.5% of the disputed tax along with the appeal. The petitioner, a partnership firm involved in the export of rough granite blocks, faced a tax levy of 14.5% against export sales due to missing 'H' Forms. Despite requests and representations, the authorities rejected the petitioner's plea to consider the forms post-assessment. The Appellate Deputy Commissioner refused to admit the appeal without the 12.5% tax payment, leading to the writ petition.

The main contention raised by the petitioner's counsel was that the issue had precedent rulings by the Division Bench, citing specific writ petition numbers. The Government Pleader opposed this argument, emphasizing the necessity of complying with Section 31 of the A.P. VAT Act. The Pleader highlighted the requirement of proof of tax payment for appeal admission, stating that accepting such requests would amount to reopening assessments. The crucial question was whether the appellate authority was justified in rejecting the appeal due to non-payment of the disputed tax amount.

The court analyzed Section 31 of the A.P. VAT Act, emphasizing that the term 'any order' in the provision extended beyond assessment orders, allowing challenges to endorsements like the one made by the Assistant Commissioner. Regarding the 12.5% tax payment condition, the court noted that the dispute did not concern tax liability but the acceptance of the 'H' Form, making the payment demand improper. Relying on a previous Division Bench decision, the court concluded that pre-deposit requirements apply only to appeals against assessment orders, rendering the insistence on 12.5% payment for this case unsustainable.

In light of the above analysis and the precedents cited, the court allowed the writ petition, setting aside the impugned order. The 2nd respondent was directed to entertain the petitioner's appeal without insisting on the 12.5% tax payment, in line with the law. The judgment did not impose any costs, and any pending miscellaneous petitions were to be closed accordingly.