2018 (5) TMI 1396 - HC - VAT and Sales Tax

Security deposit - section 28(2) of the VAT Act - Recovery of tax dues - Held that - when the Court had said that further implementation of the notices (for recovery) may be stayed, the question of predeposit would be covered by such a direction If the department had any doubt, it should have asked for clarification. At any rate, in face of such directions, condition of pre-deposit could not have been imposed. Resultantly, upon failure of the petitioner to satisfy such condition, appeal cannot be dismissed. Though expected of the petitioner in the past, there was no desired level of urgency or participation in the appellate proceedings. The appeals of the petitioner for the financial years 2010- 11 and 2011-12 involve similar issues but are placed before different appellate authorities since we are informed, in case of assessment for the assessment year 2010-11, the normal appellate authority happened to be the Assessing Officer in case of the petitioner. We would request the department to consolidate both appeals before the same Appellate authority. Petition disposed off.

Summary

Issues involved:
1. Requirement of security of ?15 crores pending appellate proceedings under section 28(2) of the VAT Act for financial years 2010-11, 2011-12, and 2012-13.
2. Disposal of appeals and stay petitions by the Appellate authority.
3. Imposition of pre-deposit conditions by the Appellate authority.
4. Adjustment of refund towards pre-deposit requirements.
5. Consolidation of appeals before the same Appellate authority for similar issues in different financial years.

Detailed Analysis:
Issue 1: The petitioner was asked to provide security of ?15 crores pending appellate proceedings under section 28(2) of the VAT Act for the financial years 2010-11, 2011-12, and 2012-13. The Court recalled an earlier order due to factual errors and revived the petition. The petitioner, a registered dealer, had appeals pending for these years, with varying pre-deposit conditions imposed by the Appellate authority.

Issue 2: The Appellate authority had issued orders for disposal of appeals and stay petitions for the financial years 2010-11, 2011-12, and 2012-13. However, delays were caused due to adjournments sought by the petitioner, leading to dismissal of appeals based on non-compliance with pre-deposit conditions.

Issue 3: Pre-deposit conditions were imposed by the Appellate authority for the financial years 2010-11, 2011-12, and 2012-13. The Court clarified that the department could not impose pre-deposit conditions contrary to the Court's directions, leading to the setting aside of appeal dismissals.

Issue 4: The Court allowed for adjustment of a refund of ?74,77,910 towards the pre-deposit requirement of ?50 lacs for the financial year 2012-13. The petitioner's lack of urgency in appellate proceedings was noted, and adjustments were permitted for the pending appeals.

Issue 5: The Court directed the department to consolidate appeals for similar issues in different financial years before the same Appellate authority. Specific directions were given for the revival and hearing of appeals without insisting on pre-deposit conditions, ensuring expeditious disposal of the appeals.

In conclusion, the Court set aside appeal dismissals, provided directions for hearing the appeals without pre-deposit requirements, allowed for adjustments of refunds towards pre-deposit conditions, and emphasized the consolidation of appeals for efficiency in the adjudicatory process.