2020 (6) TMI 12 - HC - VAT and Sales Tax

Maintainability of appeal - Requirement of mandatory pre-deposit - appeal came to be dismissed for non-enclosing the receipt of deposit of 20% of the demand as envisaged under Section 48(4)(ii) of the VAT Act - HELD THAT - This court has taken note of Ground-6 raised by appellant in that case that some time ought to have been granted to the appellant to comply with requirement of Section 48(4)(ii) of VAT Act. By oral submissions, learned counsel also tried to convince this Court that now the appellant, somehow was able to arrange the amount required for the pre-deposit and as such, by recording submissions of learned counsel for the appellant, Annexure A2 order was passed. Looking to the pleadings of appellant in tax case no.68/2019 and in WP 132/2019, particularly ground no.6 wherein the appellant wanted an opportunity to make the default good. The other thing is that this court while passing orders in tax case no. 68/2019, has recorded the submission of the learned counsel for the petitioner that by now somehow they managed to arrange funds to comply the provision of mandatory deposit. In the aforementioned facts of the case, appellant will not be permitted to raise the different pleas in different proceedings. Appeal dismissed.

Summary

Issues:
Delay in filing writ appeal, challenge to order dated 23.10.2019, assessment of tax liability, appeal dismissal for non-enclosing deposit receipt, withdrawal of Tax Case-68 of 2019, grounds raised in the appeal, inability to make pre-deposit, reliance on case laws, hardship due to factory mishap, relaxation of pre-deposit requirement, consideration of submissions, arrangement for pre-deposit, maintainability of appeal, waiver of pre-deposit, special nature of taxation laws.

Delay in filing writ appeal:
The judgment addresses the application for condonation of delay in filing the writ appeal, which was filed after a delay of 64 days. Despite being unsatisfied with the reasons provided in the application, the delay was condoned in the interest of justice to proceed with hearing the matter.

Challenge to order dated 23.10.2019:
The appeal challenges an order passed on 23.10.2019 in WPT-132 of 2019, where the Single Judge directed the appellant to make a mandatory deposit before the Tribunal to restore and decide on the appeal's merits. The appellant, facing a tax liability assessment, sought relief from the pre-deposit requirement under Section 48(4)(ii) of the VAT Act.

Assessment of tax liability:
The appellant, a VAT-registered establishment, faced proceedings initiated by the Commissioner of Commercial Tax for unregistered F-forms, proposing a tax levy of ?35,84,078. The appeal against this order was dismissed for not enclosing the required deposit receipt, leading to subsequent legal actions.

Appeal dismissal for non-enclosing deposit receipt:
The appeal before the Commercial Tax Tribunal was dismissed for failing to enclose the deposit receipt as mandated under Section 48(4)(ii) of the VAT Act. This dismissal prompted further legal maneuvers by the appellant to challenge the decision and seek relief from the pre-deposit requirement.

Withdrawal of Tax Case-68 of 2019:
The appellant withdrew Tax Case-68 of 2019, acknowledging its non-maintainability, and filed WPT-132 of 2019 to address the issues raised in the previous case. The withdrawal was accompanied by efforts to arrange the required pre-deposit amount, highlighting the procedural complexities involved.

Grounds raised in the appeal:
The appellant, citing hardship due to a factory mishap and an inability to meet the pre-deposit requirement, contested the order on various grounds, including the failure to consider submissions and the adverse impact of non-compliance on the appellant's rights.

Reliance on case laws:
The appellant relied on legal precedents, including the Punjab State Power Corporation case and the M/s UV Engineers Ltd. case, to support its arguments regarding the relaxation of pre-deposit requirements and the need for a fair consideration of the appellant's circumstances.

Hardship due to factory mishap:
The appellant's counsel highlighted the significant losses suffered by the appellant due to a factory fire, impacting the ability to comply with VAT provisions, particularly the pre-deposit requirement. The appellant's position was presented as a compelling factor in seeking relief from the strict financial obligations.

Relaxation of pre-deposit requirement:
The appellant sought relaxation of the pre-deposit requirement under Section 48(4)(ii) of the VAT Act, emphasizing the exceptional circumstances faced by the appellant and the need for a more lenient approach in light of the appellant's challenges.

Consideration of submissions and arrangement for pre-deposit:
The court considered the submissions made by the appellant's counsel regarding the arrangements made to meet the pre-deposit requirement, as well as the arguments presented in previous legal proceedings, to assess the appellant's compliance efforts and the justifiability of the appeal.

Maintainability of appeal and waiver of pre-deposit:
The judgment delved into the maintainability of the appeal, emphasizing the need for a strong prima facie case to warrant the waiver of partial or entire pre-deposit amounts, especially in the context of taxation and revenue laws, as highlighted in the Punjab State Power Corporation case.

Special nature of taxation laws:
The court underscored the special nature of taxation laws, cautioning against routine waivers of pre-deposit requirements and emphasizing the necessity of demonstrating a strong case to justify such waivers. The legal framework governing taxation issues was deemed crucial in determining the applicability of pre-deposit waivers.

Conclusion:
Ultimately, the court dismissed the appeal but allowed a 30-day extension for the appellant to make the mandatory deposit, ensuring the appellant's right to be heard and benefit from the directions issued by the Single Judge. The judgment balanced the legal requirements with the appellant's circumstances to uphold principles of justice and fairness in the taxation dispute.