2022 (6) TMI 1039 - HC - VAT and Sales Tax

Appealable order or not - endorsement on the application made by the petitioner requested for reopening the assessment for consideration of form H - non deposit of 12.5% of the disputed tax in terms of third proviso to Section 21(1) of the APVAT Act, 2005 - Section 31(1), 31(2) and 31(3)(a) of A.P. VAT Act - HELD THAT - From a reading of the provisions of Section 31(1), 31(2) and 31(3)(a) of A.P. VAT Act, it is clear that any VAT dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed by Additional Commissioner or Joint Commissioner or Deputy Commissioner, may within 30 days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed. It is to be noted here that the word used is 'any order' passed and not 'order of assessment'. Hence, the argument of the learned Government Pleader that appeal itself may not lie cannot be accepted. The word 'any order' referred to in Section 31 cannot be limited to only assessment orders. If that was the intention of the Legislature, the same would have been incorporated therein. In the absence of the same, the endorsement made by the Assistant Commissioner on 21.11.2019 can be challenged in an appeal. Payment of 12.5% of the difference of tax assessed by the authority prescribed - HELD THAT - A reading of material placed before the Court does not show that the dispute or the lis between the parties was with regard to payment of any tax or collection of difference of tax or the penalty imposed therein. In fact, the Counsel for the petitioner submits that he is not disputing, at this stage, any tax liability or interest or penalty, but, his request before the authority, at this stage, is only to consider Form-H, which he has received at a belated stage. It is no doubt true that there is a delay in making an application before the authority concerned for accepting the Form-H, but, the request before the authority was only to receive Form-H, which he has received at a belated stage, but the same was rejected. The same does not relate to collection of tax or payment of tax as the assessment was complete and the same was not challenged - Further, the proviso categorically states that an appeal shall not be admitted by the appellate authority unless the dealer produced proof of payment of tax admitted to be due and proof of payment of 12.5% of difference of tax assessed by the authority prescribed and the tax admitted by the appellant for the relevant tax period in respect of which appeal is preferred. Here the appeal does not relate to imposing tax for the relevant tax period, but for a different purpose i.e., refusing to accept 'H' Form. Therefore, we are of the view that insisting on payment of 12.5% of difference of tax may not be proper. The impugned order is set aside, directing the 2nd respondent-Appellate Deputy Commissioner (CT), Tirupati, to entertain the appeal of the petitioner against the endorsement of the respondent No.1 Commercial Tax Officer, Lalapet Circle, Guntur, dated 28.9.2020, and deal with the appeal without insisting on payment of 12.5% of disputed tax, in accordance with the law - Petition allowed.

Summary

Issues:
1. Rejection of appeal for non-deposit of disputed tax.
2. Interpretation of Section 31 of A.P. VAT Act regarding payment of 12.5% of disputed tax at the time of appeal.

Analysis:
The petitioner filed a writ petition under Article 226 seeking to set aside proceedings rejecting the appeal due to non-deposit of 12.5% disputed tax. The petitioner requested consideration of 'H' Forms submitted after assessment finalization. The High Court found the issue covered by previous orders and analyzed Section 31 of the A.P. VAT Act. The Court noted the requirement of proof of payment of disputed tax and 12.5% difference at the time of appeal filing. However, the dispute did not concern tax liability but the acceptance of 'H' Forms. The Court emphasized that the appeal was not against a tax assessment order, hence pre-deposit of disputed tax was deemed improper. Referring to previous judgments, the Court allowed the writ petition, setting aside the impugned order and directing the appeal's consideration without insisting on the 12.5% disputed tax deposit.

The Court delved into the provisions of Section 31(1), 31(2), and 31(3)(a) of the A.P. VAT Act. It highlighted the appeal process for VAT dealers objecting to any order, emphasizing the need for proof of tax payment and 12.5% disputed tax deposit for appeal admission. The Court interpreted 'any order' broadly, not limited to assessment orders. It clarified that the appeal's purpose was not disputing tax liability but requesting 'H' Forms consideration, making the 12.5% deposit unnecessary. The Court referred to a Division Bench's observation that pre-deposit is required for appeals against assessment orders, not in cases where tax quantification is absent. Consequently, the Court allowed the writ petition, directing the appeal consideration without the disputed tax deposit requirement.

In conclusion, the High Court's judgment analyzed the petitioner's appeal rejection due to non-deposit of disputed tax. By interpreting Section 31 of the A.P. VAT Act, the Court concluded that the 12.5% deposit condition was improper in the context of the appeal's purpose. Relying on previous judgments, the Court set aside the impugned order, allowing the appeal to proceed without the disputed tax deposit requirement.