2022 (3) TMI 225 - HC - VAT and Sales Tax

Maintainability of second appeal - compliance with the pre-deposit or not - Vera Samadhan Yojna 2019 scheme - Validity of assessment order - HELD THAT - One of the conditions to avail the benefit of the scheme was that if any Appeal was pending on the date, when the dealer would apply for the scheme, such appeal should have been withdrawn. In such circumstances referred to above, the writ applicant herein requested the Tribunal to permit him to withdraw the Appeal. The Tribunal vide order dated 13.02.2020 permitted the writ applicant to withdraw the Second Appeal. Today, the writ applicant is in a fix. He is here before this Court because he has not been able to avail the benefit of the scheme and at the same time, his Second Appeal before the Tribunal has also gone. However, we should take notice of the fact that for the purpose of availing the benefit under scheme, the writ applicant was obliged to deposit an amount of ₹ 21 Lakh. However, the payment of only ₹ 10 Lakh was made. Since the writ applicant failed to make the requisite deposit of the amount, the writ applicant was not in a position to avail the benefits of the Scheme - the only option now left for the writ applicant is to get his appeal which was once filed before the Tribunal heard on merits. However, the order passed by the Tribunal referred to above is coming in the way of the writ applicant. The order passed by Tribunal dated 13.02.2020 in Second Appeal No.441 of 2019 is set aside and the Tribunal is directed to restore the Second Appeal No.441 of 2019 to its original file and hear the same on its own merits and dispose of the same within a period of three months from the date of the receipt of the writ of this order - application disposed off.

Summary

Issues:
1. Challenge to assessment order under VAT Act for the year 2011-12.
2. Appeal process and pre-deposit requirements.
3. Government scheme for resolution of tax disputes.
4. Permission to withdraw appeal and subsequent consequences.
5. Failure to avail benefits of the scheme due to non-compliance.
6. Quashing of Tribunal order and restoration of the appeal for hearing.

Analysis:
1. The writ applicant challenged an assessment order under the VAT Act for the year 2011-12, leading to a demand for tax with penalty. The final liability was determined, and subsequent appeals were filed against this assessment.

2. The appeal process involved challenges with pre-deposit requirements, where the First Appeal was summarily dismissed for non-payment. The Second Appeal was allowed by the Tribunal with a direction for a specific pre-deposit amount.

3. A government scheme, Vera Samadhan Yojna - 2019, was introduced for resolving tax disputes. One condition was the withdrawal of pending appeals to avail the scheme's benefits.

4. The writ applicant sought permission to withdraw the Second Appeal to join the scheme, which was granted by the Tribunal. However, due to non-compliance with the scheme's deposit requirements, the benefits could not be availed.

5. The failure to comply fully with the scheme's conditions left the applicant in a challenging situation, unable to benefit from the scheme while losing the opportunity to pursue the appeal.

6. Considering the unique circumstances and the impact of the Covid-19 pandemic on compliance, the High Court quashed the Tribunal's order and directed the restoration of the Second Appeal for hearing on its merits, without the insistence on further pre-deposit. The Court emphasized the importance of ensuring the litigant is not left without a remedy, providing relief to the writ applicant.