2019 (4) TMI 1059 - HC - VAT and Sales Tax

Requirement of pre-deposit - maintainability of appeal - HELD THAT - It is undisputed that the assessee Company had deposited more than ₹ 60 Crores of tax and the only amount of dispute is in regard to ₹ 3 Crores and odd, for which the appeal is pending before the First Appellate Authority. It is directed that the First Appellate Authority shall proceed and decide the appeal in accordance with law expeditiously preferably within a period of two months from the date of production of a certified copy of this order - revision disposed off.

Summary

Issues: Tax liability assessment, appeal for waiver of disputed tax amount, financial status evidence, direction for appeal decision

In this judgment by the Allahabad High Court, the assessment order against the revisionist Company was made on 21.12.2018, imposing a tax liability of ?639220118, of which ?606277530 had already been deposited, leaving a dispute over the remaining amount of ?32942588. The Company filed a first appeal before the Additional Commissioner, Grade-II (Appeals) for waiver of the disputed tax amount during the appeal process. The First Appellate Authority granted a 50% waiver, leading the Company to file a second appeal before the Commercial Tax Tribunal, which partially allowed the appeal and granted a 70% waiver on the disputed tax amount in an order dated 25.1.2019. The Tribunal noted the lack of financial status documentation from the Company, basing the waiver percentage on this factor.

The counsel for the Company argued that there were disputed questions of fact and law to be decided by the First Appellate Authority, citing previous court orders directing the revenue not to insist on depositing disputed tax amounts for earlier Assessment Years. The standing counsel, however, contended that the Company failed to provide evidence of its financial condition, supporting the Tribunal's decision. Despite this, it was acknowledged that the Company had already deposited over ?60 crores in tax, with only around ?3 crores in dispute pending before the First Appellate Authority.

As a result, the Court directed the First Appellate Authority to expeditiously decide the appeal within two months upon receiving a certified copy of the order. The Company was instructed to provide security other than cash or bank guarantee to the satisfaction of the Appellate Authority within ten days. Once this condition was met, the Appellate Authority was mandated to proceed with the appeal process within the specified timeframe. Ultimately, the revision was disposed of, providing clarity on the next steps in the tax dispute resolution process.