2022 (10) TMI 1070 - HC - VAT and Sales Tax

Maintainability of appeal - requiring the full amount of tax to be deposited towards pre-deposit - cancellation of registration of three parties - non-production of statutory forms - time period to produce all the statutory forms - concessional rate of tax against the form C - HELD THAT - The tribunal concluded that the case was fit where the appellant should be directed to pay full amount of tax. The orders regarding pre-deposit and the extent to which the tribunal may require the assessee to make such pre-deposit, are the issues in the realm of discretion of the tribunal to be exercised subject to considerations based on the facts of each case and the prima facie view of the merits emerging from the record - the tribunal satisfies the said requirements to exercise the discretion whereby it thought it fit to direct pre-deposit to the extent of 100%. This court would not substitute its own reasons and for that matter the discretion validly exercised by the tribunal. The present Appeal does not raise any question of law much less substantial question of law - Appeal dismissed.

Issues involved:
- Challenge against the order passed by the Gujarat Value Added Tax Tribunal directing the appellant to pay 100% amount for pre-deposit.
- Whether the tribunal was justified in requiring the full amount of tax to be deposited towards pre-deposit.
- Validity of the demand of tax due to cancellation of registration of three parties.
- Exercise of discretion by the tribunal in directing the appellant to pay the full amount of tax.

Analysis:

1. Challenge against Tribunal's Order:
The appeal filed under Section 78 of the Gujarat Value Added Tax Act, 2003 contested the order of the Gujarat Value Added Tax Tribunal directing the appellant to pay 100% of the amount for pre-deposit. The appellant raised the substantial question of law regarding the justification of the tribunal in demanding the full tax amount as a pre-deposit.

2. Validity of Tax Demand:
The tax demand against the appellant was based on the cancellation of registration of three parties, namely M/s. Goodwill Enterprise, Jain Traders, and Komal Overseas. The appellant was found not entitled to claim tax benefits due to the absence of valid registration under Section 8 of the CST Act. The buyers from whom the appellant made purchases were not registered dealers, and their registration numbers were canceled.

3. Exercise of Discretion by Tribunal:
The tribunal considered various aspects, including the non-production of statutory forms, the lapse of more than seven years without producing the forms, and the appellant's availing of concessional tax rates without fulfilling the necessary requirements. The tribunal concluded that the appellant should pay the full tax amount based on the facts and circumstances of the case.

4. Judicial Discretion and Dismissal of Appeal:
The High Court acknowledged that the tribunal has the discretion to determine the extent of pre-deposit required from the assessee based on the case's merits. The court upheld the tribunal's decision to demand a 100% pre-deposit, emphasizing that it would not substitute the tribunal's validly exercised discretion. Consequently, the appeal was summarily dismissed as it did not raise any substantial question of law.

5. Conclusion:
The High Court's judgment affirmed the tribunal's decision to direct the appellant to pay the full tax amount as a pre-deposit, based on the circumstances and reasons presented. The court highlighted the tribunal's discretion in such matters and upheld the dismissal of the appeal, leading to the disposal of the related Civil Application as well.

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