2016 (7) TMI 220 - HC - VAT and Sales Tax

Restoration of appeal which was dismissed for want of pre-deposit - Mischief in generating C Form - interstate sale - revenue proposed to deny the benefit of concessional rate duty. - Counsel for the petitioner submitted that the petitioner has sold the goods to the registered dealer and was therefore, entitled to claim concessional rate of duty. Whatever be the action of such purchasing dealer, the petitioner cannot be denied the concessional rate of duty. - Held that - the petitioner having already deposited the sum of ₹ 4,00,000/- with the department as per the direction by the Tribunal, this shall be treated as their fulfillment of predeposit condition before the first Appellate Authority, who shall hear the petitioner s appeal on merits. The Tribunal in the impugned order dated 14.03.2016 has made certain strong observations on merits. The Appellate Authority shall decide the appeal unmindful of these observations. - Decided in favor of petitioner.

Summary

Issues:
Challenge to order of Gujarat Value Added Tax Tribunal regarding concessional rate of duty claim based on 'C' Form issued by purchaser.

Analysis:
The petitioner, a manufacturer dealer of glass items, sold goods to a registered dealer in Rajasthan and claimed a concessional rate of duty based on the 'C' Form issued by the purchaser. However, authorities alleged that the purchaser had fraudulently generated the 'C' Form, leading to a demand of ?40,85,268, including tax, interest, and penalty. The Appellate Authority directed the petitioner to predeposit the entire amount, which was not done, resulting in the dismissal of the appeal. Subsequently, the Tribunal ordered a partial payment of ?4,00,000 and scheduled a hearing. The petitioner challenged this order.

Upon review, the High Court held that the petitioner should be allowed to pursue the first appeal before the Appellate Authority by fulfilling the predeposit condition of ?4,00,000, which had already been done. The Court emphasized that the petitioner, as a seller to a registered dealer, was entitled to claim the concessional rate of duty, regardless of the actions of the purchasing dealer. The issues raised, including the validity of the 'C' Form and the denial of concessional rate, should be examined by the Appellate Authority during the appeal process.

The High Court reversed the Tribunal's order, setting aside the Appellate Authority's dismissal of the petitioner's appeal. The deposited amount of ?4,00,000 was considered as fulfilling the predeposit condition, allowing the appeal to proceed on its merits. The Court directed the Appellate Authority to decide the appeal without being influenced by the Tribunal's strong observations, emphasizing that the ultimate resolution of the disputed issues would only be determined after a thorough hearing by the competent authority.

In conclusion, the petition was disposed of, and notice was discharged. The High Court's decision reinstated the petitioner's appeal before the Appellate Authority, emphasizing the need for a fair and comprehensive examination of the issues raised regarding the concessional rate of duty claim based on the 'C' Form issued by the purchaser.