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TMI Blog2015 (1) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... attached by it with a view to recover the amount towards the pre-deposit – section 73(4) of the GVAT Act, it is apparent that the same prohibits entertainment of any appeal by an appellate authority unless the same is accompanied by satisfactory proof of payment of tax in respect of which the appeal has been preferred - However, the proviso thereto permits the appellate authority if it thinks fit for reasons to be recorded in writing to entertain the appeal without payment of tax with penalty or without penalty, on payment of proof of a smaller sum as it may consider reasonable or on the appellant furnishing in the prescribed manner, security for such amount as the appellate authority may direct - Thus, any of the aforesaid three courses of action are available to the appellate authority, if it so deems fit. The court has examined the order of assessment passed by the AO and is of the view that the petitioner does have a prima facie case in its favour - insofar as the payment of pre-deposit as directed by the appellate authority is concerned, the court is of the view that as per the averments made in the affidavit-inreply filed by the respondent that at the time when the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain books of accounts were seized. Subsequently, notices for assessment in Form 302 and 6B for the assessment year 2009-10 came to be issued under the VAT Act and CST Act respectively, by the Assistant Commissioner of Commercial Tax (3) (Enforcement) Division I, Ahmedabad. It is the case of the petitioner that pursuant to the said notices, the petitioner remained present and submitted that the petitioner had made genuine purchases and sales and also produced necessary evidence in support of his submission. Vide orders dated 31st March, 2014 made under the VAT Act and CST Act, the adjudicating authority framed assessments demanding a total amount of ₹ 35,42,64,040/- including tax, interest and penalty under the VAT Act and ₹ 54,66,643/- including tax, interest and penalty under the CST Act. Thus, the total demand raised against the petitioner by virtue of the above two orders came to ₹ 35,97,30,683/-. The petitioner carried the matter in appeals before the Deputy Commissioner of Commercial Tax on 9th May, 2014. The petitioner also requested that the appeals be admitted without any payment. The plea of the petitioner was not accepted by the appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at since the petitioner had already given its consent and permitted the department to sell the stock attached by it, it is open for the department to put the stock attached by it on sale and adjust the sale proceeds of the said stock against the outstanding demand. The Tribunal, ultimately directed the petitioner to make payment of the amount as directed by the Deputy Commissioner by way of pre-deposit within one month from the date of the order and that upon payment of the said amount either by way of payment made by the petitioner or by way of recovery from the sale of the stock, the stay would come into operation. It was further observed that till the above amount is realised by the department, over and above the attachment, the petitioner is not permitted to sell, transfer or otherwise dispose of its properties during the pendency of the appeals. The matter was thereafter adjourned to 9th October, 2014 for production of challan and details of more realisation by way of sale of stock. Being aggrieved, the petitioner has presented this petition. 5. At the outset, Mr. Manish Kaji, learned advocate for the petitioner has placed on record copies of the auction notice published by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal ought to have considered the plea of the petitioner and ought to have restored the appeals before the appellate authority without insisting upon payment of pre-deposit. 8. Vehemently opposing the petition, Mr. Jaimin Gandhi, learned Assistant Government Pleader, submitted that the petitioner has failed to make out any of the circumstances which are necessary for the purpose of waiver of pre-deposit or for grant of stay against the order of assessment, inasmuch as, the petitioner has neither made out a prima facie case nor has it been able to show that the balance of convenience lies in its favour nor has any case of irreparable loss been made out. Reliance was placed upon an unreported decision of the Supreme Court in the case of M/s. Shreenath Corporation v. Consumer Education and Research Society Others, rendered in Civil Appeal No.9052/2013, wherein the court has observed that entertainment of an appeal and stay of proceedings pursuant to the order impugned in the appeal stands on different footings, at two different stages. One (predeposit) has no nexus with the merit of the appeal and the other (grant of stay) depends on prima facie case, balance of convenience ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng pre-deposit of the above referred amount, has adopted a novel approach. Instead of deciding the matter on merits by examining as to whether the petitioner had made out a prima facie case or as to whether any of the circumstances envisaged under the proviso to section 73 of the Act are attracted, the Tribunal proceeded to ask the Department to dispose of the stock attached by it with a view to recover the amount towards the pre-deposit. By the impugned order, the Tribunal has directed the petitioner to pre-deposit the amount or, in the alternative, has directed the department to recover such amount from the sale of the stock of the petitioner whereafter the stay would come into operation. The Tribunal has further directed that till the amount is realised by the department over and above the attachment, the petitioner is not permitted to sell, transfer or otherwise dispose of the properties during the pendency of the appeals. 10. Before adverting to the merits of the rival contentions, reference may be made to the provisions of section 73 of the GVAT Act and more particularly, sub-section (4) thereof which reads as under:- 73. Appeal. (4) No appeal against an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnative, permit the respondent to recover such amount from the properties attached by it. In the opinion of this court, once the Tribunal did not deem it fit to interfere with the order passed by the appellate authority to the extent of the amount of pre-deposit directed by it, all that was required to be done was to confirm the said order and permit the petitioner to pay such amount as a condition precedent for restoration of its appeals. The Tribunal was not required to enter into any exercise thereafter as regards how such amount is to be recovered from the assets of the petitioner. In the order dated 19th August, 2014, the Tribunal has taken note of the fact that the learned advocate appearing on behalf of the petitioner had submitted that the department has attached stock, land, cars, etc. worth ₹ 53 crores by an order dated 5th July, 2011 and that three years have passed and the attachment still continues. That the department was adequately secured and hence, the appeals should be admitted without any payment and stay should be granted against recovery of outstanding payment considering the said security. From the orders passed by the Tribunal from time to time, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while considering the question of directing payment of pre-deposit or granting stay of the assessment order, cannot be sustained. 15. However, in view of the fact that the Tribunal has agreed with the appellate authority insofar as payment of predeposit is concerned, restoring the matter to the Tribunal will not serve any fruitful purpose, inasmuch as, the appellate authority/Deputy Commissioner has also dismissed the appeals on the ground of non-payment of pre-deposit. Under the circumstances, instead of remanding the matter to the Tribunal for passing formal orders in this regard, it would be appropriate to restore the appeals before the appellate authority for deciding the same on merits. 16. In the light of the above discussion, the petition succeeds and is accordingly allowed. The common impugned order dated 9th September, 2014 passed by the Tribunal in Second Appeals No.533/2014 and 534/2014, the auction notice issued by the respondent in compliance of the said order as well as the order dated 20th June, 2014 passed by the Deputy Commissioner of Commercial Tax (Appeals), Ahmedabad summarily dismissing the appeals preferred by the petitioner, are hereby quashed and set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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