2022 (3) TMI 398 - HC - VAT and Sales Tax

Validity of assessment order - benefit of concessional rate of tax under Section 8(1) of the CST Act - sales made against the C Form declaration - HELD THAT - Having regard to the fact that in the first round of litigation, an amount of ₹ 25 Lakh was deposited towards pre-deposit, it is now too much for the Tribunal to ask the Corporation to make a pre-deposit of the requisite amount only for the purpose of entertaining the Second Appeal. The Tribunal should well remember that at one point of time, it had quashed the assessment order and had thought fit to remit the matter to the Assessing Officer. Against the fresh order of assessment, the First Appeal also came to be entertained. Even the first appellate authority did not insist for any pre-deposit. The matter is remanded to the first appellate authority for the appeal to be heard on its own merits without insisting for any pre-deposit - appeal allowed by way of remand.

Summary

Issues:
1. Challenge to assessment order disallowing claims of concessional rate of tax.
2. Requirement of pre-deposit for filing appeals.
3. Tribunal's insistence on pre-deposit of entire disputed amount.
4. Dismissal of appeal for non-prosecution.
5. Tribunal's direction for pre-deposit and appeal process.

Analysis:
1. The writ applicant, a Government of India Enterprise engaged in petroleum product sales, challenged the disallowance of concessional tax rate claims under the CST Act for the year 1999-2000. The final assessment determined a liability of ?1,79,12,169.

2. The applicant filed appeals against the assessment order, with varying pre-deposit requirements. The Tribunal, after multiple rounds of appeals, insisted on a pre-deposit of ?2,17,80,126 for the Second Appeal, leading to the current writ application.

3. The High Court noted the history of the case, highlighting that the Tribunal's insistence on a substantial pre-deposit was unreasonable, especially considering the previous pre-deposit made by the applicant. The Court emphasized the lack of insistence on pre-deposit by the first appellate authority.

4. The Tribunal's dismissal of the appeal for non-prosecution raised concerns, leading to the applicant's dissatisfaction and subsequent approach to the High Court through the writ application.

5. In its decision, the High Court directed the matter to be remitted to the first appellate authority for a hearing on merits without requiring any pre-deposit. The Court emphasized the need for a fair hearing, considering the applicant's identity as the Indian Oil Corporation, and set a two-month timeline for the appeal's disposal, with a stay on coercive recovery during this period. The writ application was thus disposed of.