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2023 (1) TMI 4 - HC - VAT and Sales TaxValidity of assessment order - certain export sales was disallowed on the ground that the petitioner failed in producing the export proofs - HELD THAT - The decision of KAVYA MARKETING VERSUS STATE OF GUJARAT 2022 (4) TMI 1202 - GUJARAT HIGH COURT would squarely be applicable in facts of the present case. The Tribunal has committed serious error of law by not taking note of the prima facie case of the petitioner while examining the aspect of pre-deposit. Therefore, in the facts and circumstances of the present case, the order passed of the Tribunal deserves to be quashed and set aside and hereby quashed and set aside. The Commissioner Appeal-First Appellate Authority are directed to hear the appeal on merits. The First Appellate Authority may consider the payment of pre-deposit, a fresh keeping in mind the financial hardship expressed by the petitioner. It is made clear that we have not gone into the merits of the matter and kept all the issues open including the stay of demand to the file of the First Appellate Authority. Petition disposed off.
Issues involved:
Petition to quash orders passed by the Gujarat Value Added Tax Tribunal in Second Appeal No.988 of 2019 for non-compliance with pre-deposit requirements. Analysis: The petitioner, engaged in reselling auto parts, tyers, tubes, etc., exported goods but faced disallowance of export sales due to lack of proof. The First Appellate Authority dismissed the appeal on non-prosecution, leading to a Second Appeal before the Tribunal. The Tribunal directed a pre-deposit of Rs. 1 Cr., but upon non-compliance, dismissed the appeal on 08.09.2022. The petitioner challenged this decision, arguing arbitrariness and illegality in demanding pre-deposit without considering the case's merits. Citing a similar case, the petitioner emphasized the need for the Tribunal to assess prima facie evidence before demanding pre-deposit. The petitioner's inability to produce export documents promptly was highlighted, along with challenges due to the COVID-19 pandemic. The respondent contended that the First Appellate Authority had dismissed the appeal on merits due to the petitioner's failure to produce documents. However, the Second Appeal was dismissed solely based on non-payment of the directed pre-deposit amount. The Court, after considering both parties' arguments, found the Tribunal's actions erroneous. Relying on precedent, the Court emphasized the importance of assessing the petitioner's prima facie case before demanding pre-deposit. Consequently, the Court quashed the Tribunal's orders and directed the First Appellate Authority to hear the appeal on merits, considering the petitioner's financial difficulties. The Court kept all issues open for further consideration, including the stay of demand, and disposed of the petition without costs. In conclusion, the Court's decision highlighted the necessity for a thorough assessment of the petitioner's case before demanding pre-deposit, emphasizing fairness and adherence to legal principles.
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