2022 (12) TMI 1044 - HC - VAT and Sales Tax

Rejection of appeal on the ground of non-payment of pre-deposit amount - Violation of principles of natural justice - HELD TH AT - It is to be seen that aggrieved by the order of assessment passed by the 1st respondent dated 01.10.2013, the petitioner had filed appeal in time i.e., within thirty days as prescribed under the Act. Though the petitioner had filed appeal in time, it is an admitted fact that it did not make payment of pre-deposit of 12.5% of the disputed tax, except the payment of the appeal fee of Rs.1,000/-. Upon rejection of the appeal by the 2 nd respondent authority, the petitioner choose to challenge the said order by questioning the assessment order also before this Court and thus there was no situation where the petitioner could have made the payment of pre-deposit amount prescribed under the Act. Though the delay in the case of Innovative Systems (2 supra) 2015 (2) TMI 1314 - SUPREME COURT was of three months from the date of rejection of appeal to the date of payment, it is the principle and ratio laid down that need to be applied and not by comparing the period of delay - In the facts of the present case, since the petitioner had approached this Court upon rejection of the appeal by the 2 nd respondent and this Court having admitted the Writ Petition, this Court is of the considered opinion that the petitioner cannot be deprived of the benefit of the ratio decidendi of the judgment of the Supreme Court in Innovative Systems on the ground of lapse of long period. Since the Writ Petition is filed challenging the order of assessment which involves factual aspects as also in the alternative, the rejection of the appeal by the 2nd respondent on the ground of non-payment of the pre-deposit relying on the judgment of Ankamma Trading Co. (1 supra) 2011 (2) TMI 1254 - ANDHRA PRADESH HIGH COURT which now stands impliedly overruled, we are of the considered view that instead of this Court delving into the factual aspect involved in the matter, should direct the petitioner to make the payment of the pre-deposit amount within a reasonable time. Petition disposed off.

Summary

Issues Involved:
1. Challenge to assessment order dated 01.10.2013 for tax period 2011-12 under APVAT Act, 2005.
2. Rejection of appeal by 2nd respondent due to non-payment of mandatory pre-deposit of disputed tax.
3. Interpretation of Supreme Court judgments regarding pre-deposit payment post-appeal filing.

Analysis:
1. The petitioner, a registered dealer under AP VAT Act, 2005, challenged the assessment order dated 01.10.2013 for the tax period 2011-12. The petitioner contended that the order overlooked their objections and demanded an under-declared output tax payment of Rs.6,37,05,021 within thirty days. The petitioner then appealed the order, which was subsequently rejected by the 2nd respondent due to non-payment of the mandatory pre-deposit of 12.5% of the disputed tax as required by Section 31(1) of the Act.

2. The petitioner argued that the 2nd respondent's reliance on the Ankamma Trading Co. judgment was overruled by the Supreme Court in S.E. Graphites Private Limited v. State of Telangana, allowing payment post-appeal filing. Additionally, the petitioner cited the case of Innovative Systems v. State of A.P., where the Supreme Court condoned a delay in pre-deposit payment. The Special Standing Counsel opposed, stating that the petitioner failed to make any payment even after the first hearing, rendering them ineligible for relief.

3. The High Court considered the precedents and observed that the petitioner, despite timely filing the appeal, did not make the pre-deposit payment, opting to challenge the rejection instead. Referring to the Innovative Systems case, the Court emphasized the need to allow the petitioner to make the pre-deposit payment within a reasonable time. The Court directed the petitioner to pay the 12.5% disputed tax within two weeks, setting aside the 2nd respondent's order and restoring the appeal for further adjudication on merits.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Court's decision based on legal precedents and interpretations of relevant statutes and judgments.