2009 (3) TMI 200 - SC - VAT and Sales Tax

Whether if declaration forms are produced the ultimate demand would not exceed ₹ 15 lakhs? Held that - As is rightly contended by learned counsel for the respondents, ample opportunity has been granted to the appellant to produce the declaration forms. That apparently has not been done. The appellant has produced certain records to submit that the declaration forms can be produced at the present juncture. While issuing notice on Special Leave Petition on 13-6-2006 it was directed that on payment of ₹ 1,00,00,000/- realization of the balance payment shall be stayed until further orders. It is accepted that the amount has been deposited. Considering the facts of the case, we direct that the Tribunal shall hear the appeal on merits without insisting on any further deposit in terms of Section 43(5). It is made clear that we have expressed no opinion on the merits of the case. It is for the appellant to satisfy the Tribunal the reason for which the declaration forms could not be produced earlier and if the Tribunal is satisfied with the genuineness of the stand it shall dispose of the appeals in accordance with law.

Issues:
Challenge to order of Delhi High Court dismissing Writ Petition, interpretation of Section 43(5) of the Act, discretion of appellate authority in entertaining appeals without payment, principles of grant of stay pending disposal of matters, failure to produce declaration forms, compliance with earlier orders.

Detailed Analysis:

1. Challenge to High Court Order:
The appellant, a registered dealer under the Delhi Sales Tax Act and Central Sales Tax Act, challenged the order of the Delhi High Court dismissing the Writ Petition filed by the appellant. The High Court had directed the appellant to produce all necessary documents and statutory forms within a specified period, failing which a pre-deposit of a significant amount was required. The appellant failed to comply, leading to the dismissal of the appeals by the Tribunal.

2. Interpretation of Section 43(5) of the Act:
Section 43(5) of the Act provides conditions for entertaining appeals against orders of assessment or penalties. The appellate authority has the discretion to entertain appeals without payment of tax or penalty if security is furnished, or by directing payment of a smaller sum. The order under this section is essentially an order of stay, and the Tribunal must consider the prima facie case, balance of convenience, and irreparable loss while dealing with applications for dispensing with pre-deposit.

3. Discretion of Appellate Authority:
The Tribunal has the discretion not to insist on immediate payment as a condition for entertaining an appeal, provided reasons are recorded in writing. This discretion must be exercised judiciously, considering the principles outlined in various legal precedents, including the need to balance the interests of the parties involved.

4. Failure to Produce Declaration Forms:
The appellant contended that due to circumstances beyond their control, they could not collect the required declaration forms, which led to the substantial demand raised by the Assessing Officer. Despite ample opportunities, the appellant failed to produce the forms, resulting in the dismissal of the appeals by the Tribunal.

5. Compliance with Earlier Orders:
The appellant's failure to comply with the earlier order of the High Court to produce necessary documents and forms within the specified time frame led to the dismissal of the appeals by the Tribunal. The Tribunal held that without the required production and deposit as directed, the appeals were not entertainable.

In conclusion, the Supreme Court directed the Tribunal to hear the appeal on merits without insisting on any further deposit, emphasizing that the Court had not expressed any opinion on the merits of the case. The appellant was given the opportunity to satisfy the Tribunal regarding the non-production of declaration forms, with the directive to dispose of the appeals in accordance with the law. The appeal was disposed of with no order as to costs.

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