2024 (5) TMI 986 - HC - VAT and Sales Tax

Admission of appeal for requirement of compliance of deposit of 12.5% under proviso to Section 31 of the AP VAT Act - Rejection of endorsement dated 26.04.2023 - rejection on the ground that the Form- H could not be considered since those forms were filed after completion of the CST assessment for the year 2011-12 - HELD THAT - A bare perusal of Section 31(1) IIIrd proviso, shows that the appeal preferred under Sub-Section (1) shall not be admitted by the Appellate Authority unless the dealer produces proof of payment of tax, penalty, interest or any other amount admitted to be due, or of such installments as have been granted, and the proof of payment of twelve and half percent of the difference of the tax, penalty, interest or any other amount admitted by the appellant, for the relevant tax period, in respect of which appeal is preferred. So the IIIrd proviso, specifically refers to the amount of 12.5% of the tax, interest and penalty or any other amount admitted. The endorsement impugned before the Appellate Authority the petitioner has not to pay any tax, penalty or interest or any other amount. Consequently, there would no question of deposit of 12.5% of the tax pursuant to the IIIrd proviso. In M/s. Sri Hari Maharalayam Company 2019 (9) TMI 1550 - ANDHRA PRADESH HIGH COURT direction was given to the appellate authority to entertain the appeal without insisting upon payment of 12.5%. The impugned order is set aside with direction to the respondent No. 2 to consider the admission of the appeal without insisting for the compliance with the III proviso of Section 31 of the AP VAT Act - this writ petition is allowed.

Summary

Issues:
1. Challenge to endorsement requiring payment of 12.5% of disputed tax for admission of appeal under Section 31 of AP VAT Act.
2. Interpretation of Section 31(1) IIIrd proviso of AP VAT Act.
3. Applicability of precedent in M/s. Sri Hari Maharalayam Company case.

Detailed Analysis:

1. The petitioner challenged an endorsement issued by the 2nd Respondent, seeking proof of payment of 12.5% of disputed tax for admission of appeal dated 6.2.2024. The petitioner sought the court to set aside the endorsement as illegal, arbitrary, and contrary to law. The petitioner argued that the endorsement was in violation of settled principles and requested the court to direct the 2nd Respondent to admit the appeal without insisting on the payment of 12.5% of the disputed tax. The petitioner contended that the requirement of depositing 12.5% did not apply as they were challenging the endorsement dated 26.04.2023 and not the assessment order.

2. The interpretation of Section 31(1) IIIrd proviso of the AP VAT Act was crucial in this case. The provision states that an appeal shall not be admitted unless the dealer produces proof of payment of tax, penalty, interest, or any other amount due, and 12.5% of the difference of the tax admitted by the appellant. The court analyzed this provision and found that the petitioner was not required to pay any tax, penalty, or interest as per the endorsement being challenged. Therefore, the court concluded that there was no need for the petitioner to deposit 12.5% of the tax as mandated by the IIIrd proviso of Section 31(1) of the AP VAT Act.

3. The court referred to the precedent set in the case of M/s. Sri Hari Maharalayam Company, where it was held that if an appeal is filed against an endorsement without a quantified tax amount, the insistence on payment of 12.5% of the disputed tax is untenable. The court concurred with the decision in the aforementioned case and directed the respondent to consider the admission of the appeal without requiring compliance with the IIIrd proviso of Section 31 of the AP VAT Act. Consequently, the court allowed the writ petition, set aside the impugned order, and instructed the respondent to entertain the appeal without insisting on the payment of 12.5% of the disputed tax. No costs were awarded, and pending miscellaneous petitions were closed as a result of the judgment.