2023 (2) TMI 136 - HC - VAT and Sales Tax

Inter-state sale or local sale? - C Forms and other details like Form 402, not produced - demand of pre-deposit - HELD THAT - The petitioner was not in a position to pay the amount of pre-deposits and had also closed its business and shifted to Rajasthan owing to the fact that, its registration had been cancelled. Our attention is drawn to the order of the Appellate Authority for the year 2010-11 and 2011-12 as also the order dated 29.06.2019 under Section 73 of the VAT Act, whereby the authority concerned had permitted the payment of predeposit of 15% of the tax amount. The First Appellate Authority also had adjudicated the matter and as a substantial reduction from the total demand which had been raised the concerned years. There had been no challenge to the direction of 15% of the tax amount during the pendency of the adjudication. There is no reason as to why in the case of the very assessee when for the assessment years 2010-11 and 2011-12 the authority concerned had permitted the payment of pre-deposit of 15% of the tax amount. Without entering into merit of the matters and also the sheer reflects of time also would necessiate for us to intervene and direct the pre-deposit amount to be quantified at the rate of 15% of the tax demand raised by the respondent rather than 15% of the total amount fixed by the Assessing Officer. The impugned order passed by the Tribunal is set aside and matter relegated to the First Appellate Authority for the deposit of 15% of the tax amount within a period of four weeks from the date of receipt of a copy of this order - petition allowed.

Summary

Issues:
1. Assessment proceedings under VAT Act and GST Act for the year 2008-09.
2. Search operation conducted at the petitioner's premises.
3. Notices issued for assessment and show cause.
4. Appeals filed challenging assessment orders.
5. Petitioner's inability to pay pre-deposit due to health and financial issues.
6. Dismissal of Second Appeal by the Tribunal.
7. Dispute over pre-deposit amount for tax demand.

Analysis:

1. The judgment pertains to a group of matters involving identical questions of facts and law under the VAT Act and GST Act for the assessment year 2008-09. The petitioner, engaged in trading various goods, faced assessment proceedings and notice for audit assessment after a search operation at their premises.

2. A search operation conducted at the petitioner's premises yielded impounded files containing purchase and sales bills for the period 2008 to 2012. Subsequently, assessment proceedings were initiated, and notices were issued for making assessments under the VAT Act, alleging discrepancies in sales activities.

3. Notices were issued to the petitioner for assessment under the VAT Act, and show cause notices were served, questioning the nature of sales made by the petitioner. Despite responses and submissions by the petitioner, demands were raised treating interstate sales as local sales due to missing documentation.

4. The petitioner challenged the assessment orders by filing appeals before the Deputy Commissioner of Commercial Tax and the Tribunal. The Tribunal directed the petitioner to pay a pre-deposit of 20% of the total demand, leading to further appeals before the High Court seeking relief from the pre-deposit requirement.

5. The petitioner cited health issues and financial constraints as reasons for their inability to pay the pre-deposit amount. The petitioner's physical ailments and financial difficulties, along with those of family members, were highlighted in the petition to seek leniency in the pre-deposit requirement.

6. The Tribunal's dismissal of the Second Appeal prompted the High Court to intervene and address the issue of the pre-deposit amount. The Court noted discrepancies in the pre-deposit percentages allowed for different assessment years and directed the petitioner to pay 15% of the tax demand within a specified timeframe.

7. The High Court allowed the petitions, quashed the Tribunal's order, and directed the petitioner to deposit 15% of the tax demand within four weeks. The Court emphasized the need for timely resolution of the pending matters and clarified that the observations made in the judgment would not hinder the adjudication on merit in the future proceedings.