2019 (8) TMI 1361 - HC - VAT and Sales Tax

Maintainability of appeal - statutory deposit not paid within time - Validity of assessment order - HELD THAT - It was not proper on the part of the Appellate Deputy Commissioner (CT), Secunderabad Division, Hyderabad, to reject the appeal filed by the petitioner-company on the ground of delayed deposit of 12.5% of the disputed amount of tax. The appellate order dated 30.03.2019 passed by the Appellate Deputy Commissioner (CT), Secunderabad Division, rejecting the petitioner-company s appeal on this ground is accordingly set aside and the said appeal is restored to the file of the said appellate authority. The Appellate Deputy Commissioner shall proceed to hear the appeal on merits. Petition allowed.

Summary

Issues:
1. Appeal against assessment order under Telangana Tax on Entry of Goods into Local Areas Act, 2001 dismissed due to non-payment of statutory deposit.
2. Interpretation of legal position regarding condonation of delay in deposit of disputed tax amount for filing an appeal.

Analysis:
1. The petitioner, M/s. Hyderabad Cylinders Private Limited, challenged an assessment order related to the tax period 2015-16 under the Telangana Tax on Entry of Goods into Local Areas Act, 2001. Their appeal was dismissed by the Appellate Deputy Commissioner due to non-payment of the required 12.5% statutory deposit of the disputed tax amount within the stipulated time. The Appellate Deputy Commissioner held that the delay in deposit could not be condoned, leading to the dismissal of the appeal.

2. The High Court analyzed the legal position on the issue of condonation of delay in depositing the disputed tax amount for filing an appeal. Referring to the Supreme Court judgments in M/s.S.E.GRAPHITES PRIVATE LIMITED v. STATE OF TELANGANA and M/s.INNOVATIVES SYSTEMS v. STATE OF ANDHRA PRADESH, the High Court concluded that delay in making the deposit should be condoned if the appeal was filed within the limitation period. The Court held that the Appellate Deputy Commissioner's rejection of the appeal solely based on the delayed deposit was incorrect in law. The legal position established by the Supreme Court required the appeal to be decided on merits despite the delay in deposit.

3. In light of the settled legal position, the High Court set aside the appellate order dismissing the petitioner's appeal and restored it to the appellate authority for a fresh hearing on merits. The Court directed the Appellate Deputy Commissioner to dispose of the appeal within thirty days from the receipt of the order. Consequently, the writ petition was allowed, and any pending miscellaneous petitions were closed without any order as to costs.