2019 (5) TMI 443 - HC - VAT and Sales Tax

Maintainability of appeal - petitioner s grievance is that the long pendency of the application seeking waiver, was contrary to Section 74(3) - HELD THAT - It is evident on a plain reading of the two provisions that right to appeal is conferred upon the aggrieved party under Section 72. The appeal has to be preferred to the Deputy Commissioner or the Excise Commissioner or in the case of the primary order being made by the Excise Commissioner to the Financial Commissioner under Section 72(3) . The limitation for such an appeal is within 30 days from the date of the communication of the impugned order - A joint reading of the relevant parts of Section 72 and Section 74, clarifies that if the appeal is properly filed, in the sense that it is accompanied by the amount in dispute, determined by the primary assessing authority as a demand, the requirements of Section 72(7) would apply. On the other hand, if there is no compliance with Section 74(1) and the aggrieved party seeks relief by way of waiver of pre-deposit under Section 74(2), the application has to be made for that purpose setting out the grounds. This Court is of the opinion that there is no consequence of the kind that is sought to be urged with regard to Section 74(3). One of the indications of a statute being mandatory is that it is cast in imperative terms and the consequence of the failure to comply with such mandate is provided. Not only is Section 74(3) silent as to the consequence of non-compliance, the use of the words where it is possible to do so expressly indicates its directory (and not mandatory) nature. This is in contrast to Section 72(7), where the proviso provides the consequence for non-compliance. Petition allowed.

Summary

Issues:
1. Application for waiver/exemption from pre-deposit under Section 74(2) of the Delhi Excise Act, 2009.
2. Rejection of waiver application and subsequent demand for payment.
3. Compliance with statutory provisions regarding appeals, waiver applications, and timelines.
4. Legality and reasoning of the order rejecting the waiver application.
5. Proper adjudication and relief in accordance with the law.

Issue 1: Application for waiver/exemption from pre-deposit under Section 74(2) of the Delhi Excise Act, 2009:
The petitioner sought waiver from depositing the demanded amount as a pre-condition for appeal hearing under Section 74(2). The application was made along with the appeal. The petitioner argued that the long pendency of the waiver application was contrary to Section 74(3) and criticized the subsequent actions of the excise authorities. On the other hand, the respondents contended that the waiver application was decided after due consideration and urged the court not to interfere under Article 226 of the Constitution.

Issue 2: Rejection of waiver application and subsequent demand for payment:
The petitioner challenged the rejection of the waiver application and the demand for payment following the order dated 20.02.2019. The petitioner argued that the demand for the amount, threatening property attachment, was arbitrary. The court noted the petitioner's reliance on Rule 56(d) regarding leftover liquor stock attributing it to the vendor or manufacturer, advocating destruction instead of generating demand. The Revenue/respondent defended the orders, emphasizing compliance requirements and the legality of the decisions made.

Issue 3: Compliance with statutory provisions regarding appeals, waiver applications, and timelines:
The court analyzed Sections 72 and 74 of the Act to determine the procedural requirements for appeals and waiver applications. It clarified that if an appeal is properly filed with the demanded amount, Section 72(7) applies. However, non-compliance with Section 74(1) necessitates a waiver application under Section 74(2). The court deliberated on the mandatory vs. directory nature of Section 74(3) and the consequences of non-compliance, distinguishing it from Section 72(7).

Issue 4: Legality and reasoning of the order rejecting the waiver application:
The court scrutinized the order dated 20.02.2019 and found it lacking in reasoned analysis. Despite extensive arguments and prima facie grounds presented by the petitioner, the Excise Commissioner's order did not meet the standards of a reasoned decision. The court set aside the order, emphasizing the need for a proper discussion of arguments and merits before granting relief.

Issue 5: Proper adjudication and relief in accordance with the law:
In conclusion, the court allowed the petition, setting aside the impugned orders and directing a fresh hearing before the Excise Commissioner. The court criticized the inadequacy of the previous order and recommended examination by the Chief Secretary for necessary action. The court emphasized the importance of a reasoned order and compliance with statutory provisions for fair adjudication.

This detailed analysis covers the issues raised in the judgment, addressing the legal nuances and arguments presented by the parties involved.