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TMI Blog2014 (4) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... t he was not required to be registered under the Gujarat Value Added Act, 2003 (hereinafter referred to as 'the Act'), he did not apply for registration. The adjudicating authorities, however, initiated proceedings questioning why he had not obtained registration and denied the tax credits taken by him on the purchases so made. 2.3 The adjudicating authority passed an order against the appellant in January 17, 2010 confirming the tax demand of Rs. 41,81,169/- and further imposing penalty of Rs. 35,12,927/-. He also levied interest. This order the appellant challenged before the Appellate Commissioner and prayed for waiver of pre-deposit pending such appeal. On such application, the Appellate Commissioner passed an order insisting on the appellant depositing 25% of the duty and penalty confirmed by way of pre-deposit, subject to which there would be stay against the rest of the recovery. 2.4 Since the appellant did not make such deposit within the time permitted, the Appellate Commissioner by an order dated March 31, 2011, dismissed the appellant's appeal only on the ground of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/- 4. Mr. G.Z. Alvi, the learned STP for the appellant will take the necessary information from his client about the payment. 5. In view of the same, the matter is kept for hearing on 16.8.2011. The department will not initiate any coercive measures proceeding up to 19.8.2011. Pronounced in open court on this 25th day of July, 2011." 2.7 Ultimately, on April 29, 2013, the Tribunal passed the impugned order and examined the validity of the assessment order. The Tribunal held that no interest was chargeable from the appellant, who was an unregistered dealer. However, penalty was correctly levied. Under the circumstances, the Tribunal held and observed as order : "The appellant has filed this appeal against the order passed by the learned Deputy Commissioner of Commercial Tax, Appeal-1, Ahmedabad on 31/03/2011 whereby the appeal filed before him came to be dismissed for non payment of 25% of the total tax demand by way of pre-deposit. 2. This Tribunal has passed an order on 25/07/2011 and after considering the fact that an amount of Rs. 6,68,242/- was deducted at source and an amount of Rs. 5,90,000/- was recovere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amount confirmed by the adjudicating authority. When the appellant failed to fulfil such requirement, his appeal came to be dismissed. It was against this order that the appellant had preferred appeal before the Tribunal. The scope of the appeal before the Tribunal, therefore, had to be limited to the question of finding out whether the order passed by the Commissioner insisting on the appellant depositing certain amount by way of pre-deposit was valid or not and resultantly, his decision to reject such an appeal for non-compliance with such requirement was correct or not. 5. Unless and until the answers were given to such questions, the appellant's first appeal before the appellate authority was simply not maintainable and could not have been entertained. If that be so, the Tribunal could not have entered into merits and in the appeal before itself and given a judgment on the validity of the order of assessment. In the process, the Tribunal jettisoned the first appeal before the Appellate Commissioner and also waived the requirement of pre-deposit without passing any order to that effect. If the Tribunal was of the opinion that the condition imposed by the Appellate C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o interfere in all such cases where the Tribunal has straightway chosen to decide the matter on merit instead of determining issue of predeposit which was at large before it. However, so as to ensure that a dent is made in such practice followed consistently that we have chosen to remand this matter. Once, when assessee chooses not to comply with the requirement of making predeposit or contest the matter on the ground of predeposit and either side approaches the second appellate authority, there does not arise any question of circumventing the very stage and exercise the powers of first appellate authority. We say so as the Statute provides that even on adjudication of the issue on merit by the first appellate authority, either side is entitled to challenge such reasonings before the second appellate authority. Not only the parties and the second appellate authority would be deprived of the reasonings of the first appellate authority but chance of either sides of availing the opportunity of appeal on merit also gets marred by this process. Even if it is felt by the Tribunal that the issue is covered by the decision of the higher forum, it can always direct the parties to agitate th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all as is apparent from the discussion held hereinabove.' 8. The learned Assistant Government Pleader Mr. Jaimin Gandhi, however, relied on the judgment dated September 12, 2013 rendered by the Division Bench of this Court in Tax Appeal No.667 of 2013 and connected appeals, in which when the Tribunal had under similar circumstances entertained the appeal of the assessee on merits, but dismissed it, the Court held that the appellant cannot raise the ground of impropriety on the part of the Tribunal merely because he has lost in appeal on merits. In the present case, however, we have suo motu taken such an objection against the decision of the Tribunal and in fact, the appellant had partially succeeded before the Tribunal. 9. In the circumstances, the order dated April 29, 2013 passed by the Gujarat Value Added Tax Appellate Tribunal at Ahmedabad is quashed. The appeal be placed back before the Tribunal for fresh consideration and disposal in accordance with law bearing in mind the observations made above. It would be open for the appellant to amend his appeal before the Tribunal, for which he may make an application latest by February 28, 2014. It is clarified that if the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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