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TMI Blog2016 (6) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... ority despite sufficient chances that the appellate authority dismissed the appeals for default. In such facts, in order to bring a degree of seriousness on part of the appellant, it was undoubtedly necessary to impose a condition of predeposit. However, directing deposit of 25% of the due tax demand was excessive. In facts of the case, we therefore, direct the appellant to deposit a total of ₹ 50 lakhs with the State authority within a period of four months - part relief granted to appellant. - TAX APPEAL NO. 1202 of 2014 TO TAX APPEAL NO. 1205 of 2014 - - - Dated:- 6-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : MR P P MAJMUDAR, ADVOCATE, MR SP MAJMUDAR, ADVOCATE FOR THE OPPONENT : MS JIRGA JHAVERI, AGP ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Leave to amend the prayer clause in each appeal. 2. In essence in these appeals, we are concerned with condition of predeposit imposed by the Value Added Tax Tribunal ( the Tribunal for short) by an order dated 8.1.2013. By such order, the Tribunal insisted that the appellant deposits 25% of the tax demand for each year within three months of the date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the appeals shall be summarily dismissed. 5. This order of the Tribunal was challenged by assessee by filing Tax Appeal No.403/2013 and connected appeals. By the time High Court heard such appeals, the Tribunal had already dismissed the tax appeals of the assessee by a common order dated 15.4.2013 for want of fulfilling the condition of predeposit. On 14.6.2013, therefore, the assessee withdrew Tax Appeal No.430/2013 and connected appeals. These fresh appeals were thereafter, filed in which the assessee has challenged both the orders passed by the Tribunal imposing condition of predeposit and subsequent order dismissing the appeals for non fulfillment of such conditions. 6. Learned counsel Shri Majmudar for the appellant submitted that the company is in weak financial condition. The scheme for reconstruction is pending before the AAIFR. In terms of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 ( SICA for short) therefore, no condition for predeposit could have been imposed. At one stage, the Tribunal had remanded the proceedings to the appellate Commissioner to decide the appeals on merits without any further predeposit. The assessee could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial company] shall lie or be proceeded with further, except with the consent of the Board or, as the case may be, the Appellate Authority 9. In terms of subsection (1) of section 22 in respect of an industrial company where inquiry under section section 16 is pending or scheme under section 17 is under preparation or consideration or sanctioned or where an appeal under section 25 is pending, notwithstanding anything contained in any other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery or enforcement of any security against the company or its guarantors shall lie or be proceeded further, except with the consent of the Board or, as the case may be, the Appellate Authority. Subsection (1) of section 22 of SICA is worded widely and range of proceedings such as winding up of the company, execution, distress or the like against the properties of the company or suit for recovery of money etc, would not lie or be proceeded, except with the consent of the Board or the appellate authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te on this aspect. 12.We may however, notice the judgement of the Supreme Court in case of M/s. Indian Maize Chemicals Ltd. v. State of UP and others reported in Judgement Today 1997 (1) SC 688. In the said case, the petitioner had obtained electric connection from UP State Electricity Board and had executed an agreement for such purpose. A sum of ₹ 49.95 lacs was due from the petitioner to the Board. When the Board raised such demand, the petitioner with a view to avoid disconnection of the electric supply, agreed to pay the sum in installments in 12 months. The petitioner after depositing one installment defaulted in further payment and approached the High Court against possible disconnection of electricity supply. In this context, the Supreme Court held and observed as under : 5. A reading of the above section would indicate that when the proceedings are pending before the BIFR in respect of any matter referred to therein for inquiry by the Board, the proceedings or order of execution, distress or the like would be stayed until the proceedings get concluded before the BIFR or would not be proceeded without the leave of the Board or appellate authority. It is see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en for the company to establish before the appellate authority that condition of predeposit is required to be waived. 14. Reverting to the facts of the present case, we may recall at one stage the Tribunal had itself remanded the proceedings before the appellate authority for fresh decision without insisting on any predeposit. It was only when the appellant failed to appear before the appellate authority despite sufficient chances that the appellate authority dismissed the appeals for default. In such facts, in order to bring a degree of seriousness on part of the appellant, it was undoubtedly necessary to impose a condition of predeposit. However, directing deposit of 25% of the due tax demand was excessive. 15. In facts of the case, we therefore, direct the appellant to deposit a total of ₹ 50 lakhs with the State authority within a period of four months from today, upon which, the impugned orders of the Tribunal would stand reversed. The appellate proceedings would be revived before the appellate authority who shall after verifying that such predeposit has been made decide the proceedings on merits. The appellant shall cooperate in early disposal of such proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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