2022 (4) TMI 770 - HC - VAT and Sales Tax

Violation of principles of natural justice - inter-state sales against C Form - assessment of central tax on the export sale - recovery of false and fabricating evidences - levy of tax emerging out of the assessment - HELD THAT - The first appellate authority was directed by the Tribunal to hear the appeals a fresh on merits and the recovery proceedings were also ordered to be stayed till the final disposal of the first appeals. All the aspects which the Tribunal took into consideration, are the very same aspects even so far as the assessment for the F. Y. 2015-16 is concerned - It appears that the Joint State Tax Commissioner, Ahmedabad has accepted the case of the writ applicant based on Form C produced by the writ applicant, thus treating the transactions as interstate transactions not taxable under the State Act. With respect to the assessment for the F. Y. 2015-16, the appeals filed by the writ applicant herein before the first appellate authority should be heard on their own merits. In fact, both the appeals can be heard together on their own merits i.e. for the F. Y. 2014-15 as well as for the F. Y. 2015-16 - Application allowed.

Summary

Issues:
Challenging assessment order for F.Y. 2015-16, Pre-deposit requirement for appeals, Compliance with tax laws, Tribunal's decision on pre-deposit, Appeal to High Court for relief.

Analysis:
The writ applicant, a registered dealer under the GVAT Act and CST Act, challenged the assessment order for F.Y. 2015-16 due to a show cause notice alleging tax evasion on interstate sales and export transactions. The order demanded full tax assessment, interest, and penalties. Despite timely returns and self-assessment, the first appellate authority required a 20% pre-deposit for hearing the appeals, leading to dismissal for non-compliance. The Tribunal upheld the pre-deposit requirement, citing non-compliance with tax laws and the case of M/s. Tudor India Ltd. & A. Anilkumar. The Tribunal emphasized the need for proper tax payment as per Section 73 of the GVAT Act.

For the F.Y. 2014-15, the Tribunal allowed appeals based on detailed evidence submitted by the appellant, including invoices, affidavits, and assessment orders of buyers confirming interstate transactions. The Tribunal found faults in the assessing authority's order, noting lack of reasoning, non-discussion of submissions, and conversion of refund into dues without proper justification. The Tribunal directed a fresh hearing by the first appellate authority within six months, staying recovery proceedings.

During the hearing, the Government Representative highlighted past litigation regarding pre-deposit orders, indicating ongoing disputes. The High Court acknowledged the successful appeal for F.Y. 2013-14 based on Form 'C' submissions. Considering the favorable outcome and evidence presented, the High Court allowed the writ application, directing the first appellate authority to hear both F.Y. 2014-15 and 2015-16 appeals on their merits without pre-deposit requirements. Recovery proceedings were stayed pending appeal decisions, ensuring due process and fair consideration of the appeals.