2020 (8) TMI 291 - HC - VAT and Sales Tax

Maintainability of appeal - Failure to make pre-deposit - HELD THAT - The requisite amount to be paid towards the pre-deposit is to the tune of ₹ 4,36,28,894/- being 20% of the assessed liability. We are informed that the department has been able to recover more than ₹ 1.00 crore in this regard. The learned counsel appearing for the writ applicant makes a statement that his client would deposit an additional amount of ₹ 60,00,000/- within a period of two weeks from today. The appellate orders dated 3-7-2020 passed by the respondent No.2 are hereby quashed and set aside and the appeals are restored to their original files on the condition that the writ applicant shall deposit an amount of ₹ 60.00 lakhs with the respondent No.2 within a period of two weeks from today - Application allowed.

Summary

Issues:
1. Relief sought by the writ applicant under Article 226 of the Constitution of India.
2. Failure to pay the required pre-deposit for First Appeals under the GVAT Act.
3. Amount to be paid towards pre-deposit and recovery actions by the department.
4. Decision on quashing the appellate orders and restoring the appeals.

Analysis:

1. The writ applicant, a company engaged in manufacturing and trading of petrochemicals, sought relief under Article 226 of the Constitution of India, requesting the quashing of the recovery order and appellate orders initiated by the respondents. The applicant prayed for the restoration of appeals without the need for further pre-deposit, a stay on recovery actions, and other consequential reliefs as deemed fit by the court.

2. The controversy centered around the writ applicant's failure to pay 20% of the total liability towards pre-deposit as required under Section 73 of the GVAT Act for entertaining First Appeals before the Appellate Authority. The First Appellate Authority refused to entertain the appeals due to this non-compliance with the pre-deposit condition.

3. The court noted that the assessed liability's pre-deposit amount was ?4,36,28,894, of which the department had already recovered over ?1.00 crore. The writ applicant agreed to deposit an additional ?60,00,000 within two weeks. The court, considering the circumstances, directed the applicant to make this additional deposit towards the pre-deposit requirement, allowing the applicant an opportunity to argue the appeal on its merits.

4. After hearing arguments from both parties and examining the records, the court quashed and set aside the appellate orders dated 3-7-2020. The appeals were restored on the condition that the writ applicant deposits ?60.00 lakhs with the respondent within two weeks. Compliance with this deposit condition would enable the appeals to be heard on their merits by the respondent, thereby leading to the success of the writ application.