2014 (7) TMI 1367 - HC - VAT and Sales Tax

Violation of principles of Natural justice - refund claim - matter remitted without passing any conditional order and in any event, if the amount of input tax credit is considered - HELD THAT - It has to be pointed out, at this stage, that, once it has been found that the orders impugned in the writ petitions are unsustainable on account of violation of principles of natural justice, it is wholly unnecessary to impose any condition while remitting the matter for fresh adjudication and in the considered opinion of this Court, the direction given to the appellant/writ petitioner to deposit 10% of the tax amount as claimed in the demand notice, as a condition precedent to enquire into the matter, is unsustainable and the said portion of the order is liable to be set aside. The impugned order is set aside insofar as directing the appellant/writ petitioner to deposit 10% of the tax claimed in the demand notice and in other respects, the common order dated 06.06.2014 passed in the writ petitions, stands sustained - Appeal allowed.

Summary

Issues Involved:
Challenge to impugned orders, setting aside orders, remitting matter for fresh consideration, deposit condition, principles of natural justice violation, entitlement to refund, interest of revenue, sustainable orders, dismissal of writ appeals.

Analysis:
The petitioner challenged the respondent's proceedings, which were set aside in the writ petitions, remitting the matter back for fresh consideration with a condition to deposit 10% of the tax amount claimed in the orders. The appellant argued that the conditional order was unnecessary as the impugned orders were found unsustainable. On the other hand, the Government Advocate contended that the interest of revenue was considered, and if the appellant's claim was upheld, they could seek a refund. The Court held that imposing a deposit condition was unwarranted once the impugned orders were deemed unsustainable due to a violation of natural justice principles. Thus, the direction to deposit 10% of the tax amount was set aside.

The writ appeals were allowed, setting aside the order directing the appellant to deposit 10% of the tax claimed. The Court granted time for the appellant to submit objections and documents, with the respondent instructed to consider them independently and pass fresh orders expeditiously. No costs were awarded, and connected Miscellaneous Petitions were closed. However, any payment made as per the previous order need not be returned to the appellant pending the new order.