2019 (8) TMI 1250 - HC - VAT and Sales Tax

Maintainability of appeal - compliance with the statutory deposit of 12.5% of the disputed amount of tax was not paid within time - HELD THAT - In view of decision of Supreme Court in M/s. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF TELANGANA 2019 (7) TMI 589 - SUPREME COURT and M/s. INNOVATIVES SYSTEMS 2015 (2) TMI 1314 - SUPREME COURT , once an appeal was filed within the limitation period but the deposit of 12.5% of the disputed amount of tax, in respect of which the appeal was preferred, is made beyond the limitation prescribed in that regard, the delay in compliance ought to be condoned thereby requiring the appeal to be decided on merits by the appellate authority. It was not proper on the part of the Appellate Deputy Commissioner (CT), Secunderabad Division, Hyderabad, to reject the appeals filed by the petitioner-company on the ground of delayed deposit of 12.5% of the disputed amount of tax - The Appellate Deputy Commissioner shall proceed to hear the appeals on merits. In terms of the direction of the Supreme Court in M/s. S.E. GRAPHITES PRIVATE LIMITED(supra), the Appellate Deputy Commissioner shall dispose of the appeals not later than thirty (30) days from the date of receipt of a copy of this order. Petition allowed.

Summary

Issues:
- Assessment orders under the Telangana Tax on Entry of Goods into Local Areas Act, 2001
- Dismissal of appeals by the Appellate Deputy Commissioner due to non-payment of statutory deposit
- Interpretation of legal position regarding delayed deposit of disputed tax amount for appeals

Analysis:
The High Court of Telangana and Andhra Pradesh addressed the grievances of Hyderabad Cylinders Pvt. Ltd. regarding assessment orders for tax periods 2013-14, 2014-15, and 2016-17 under the Telangana Tax on Entry of Goods into Local Areas Act, 2001. The petitioner had filed appeals against these orders, but they were dismissed by the Appellate Deputy Commissioner due to the non-payment of the statutory deposit of 12.5% of the disputed tax amount within the stipulated time. The Appellate Deputy Commissioner held that the delay in depositing the amount could not be condoned, leading to the dismissal of the appeals.

The Court found the understanding of the Appellate Deputy Commissioner to be legally incorrect, citing a Supreme Court judgment in M/s. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF TELANGANA. The Supreme Court had observed that delays in depositing the required amount should be condoned if the appeal was filed within the limitation period. The Court further referenced a decision in M/s. INNOVATIVES SYSTEMS v. STATE OF ANDHRA PRADESH, stating that such delays should not hinder the appeals from being decided on their merits by the appellate authority.

Based on the settled legal position highlighted by the Supreme Court judgments, the High Court set aside the orders of the Appellate Deputy Commissioner rejecting the appeals of the petitioner-company due to delayed deposit of the disputed tax amount. The Court directed the Appellate Deputy Commissioner to hear the appeals on their merits and dispose of them within thirty days from the receipt of the order. Consequently, the writ petitions were allowed, and any pending miscellaneous petitions were closed without any costs imposed.