2016 (8) TMI 671 - HC - VAT and Sales Tax

Waiver of pre-deposit - what would be the disputed turnover to be reckoned for the purpose of arriving 25% of the disputed tax to be deposited as pre-deposit for entertaining the appeal - part of the demand contested in the appeal and part of the demand contented in writ petition - Held that - the peitioner was fully justified in contending that he is entitled to pay 25% of the tax on the disputed turnover which has been calculated by them excluding the turnover which is the subject matter of challenge in the the earlier writ petitions filed by the petitioner. In the light of the above interpretation, the observation made in the impugned audit calls for interference. Accordingly, the writ petition is allowed and the impugned audit is set aside and the petitioner is directed to re-present the appeal before the second respondent, who is directed to take the same on file and proceed in accordance with law as the petitioner has already effected appropriate pre-deposit. - Decided in favor of petitioner.

Summary

Issues:
Challenge to orders passed by the Appellate Authority, disputed turnover, maintainability of appeal, pre-deposit requirement, impact of writ petitions challenging assessment orders.

Analysis:
The petitioner challenged orders passed by the Appellate Authority regarding the assessment for the year 2007-08, disputing a specific turnover. The petitioner also filed writ petitions questioning assessment orders for other turnovers. The petitioner argued serious violations of natural justice and pre-decision by the Assessing Officer. The petitioner contended that the appeal was lodged by remitting 25% of the disputed tax. However, the appeal papers were returned as not maintainable due to lack of stay on tax demand in the writ petitions challenging other turnovers.

The petitioner cited the case of Kanpur Vanaspati Stores vs. Commissioner of Sales Tax to support their claim that the admitted liability in the memorandum of appeal should be the liability admitted by the assessee. The Additional Government Pleader argued that since the turnover disputed in the writ petitions was not stayed, the appeal was not maintainable. The main issue was determining the disputed turnover for calculating the pre-deposit required for appeal.

The High Court analyzed the impact of the writ petitions challenging specific turnovers and the effect of the interim order issued in those petitions. The Court noted that the turnovers disputed in the writ petitions were suspended due to the interim order, affecting the calculation of the disputed turnover for the appeal. Referring to the Kanpur Vanaspati Stores case, the Court emphasized that the tax admitted in the memorandum of appeal should be based on the liability admitted before the assessing authority.

Based on the interpretation of the law and previous judgments, the Court held that the petitioner was justified in excluding the turnovers disputed in the earlier writ petitions from the calculation of the disputed turnover for the appeal. Consequently, the Court allowed the writ petition, set aside the audit memo, and directed the petitioner to re-present the appeal with the correct pre-deposit. The second respondent was instructed to proceed with the appeal in accordance with the law.