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TMI Blog2019 (7) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... irst proviso in the concerned Section (Section 19 and Section 31, as the case may be) pertains to limitation period for filing of an appeal; and discretion of the Appellate Authority to condone the delay in filing of such appeal, up to a maximum period specified therein. Indeed, the second proviso is part of the same Section. However, it is an independent condition and in one sense, mutually exclusive condition mandating or enjoining the appellant to produce proof of payment of tax dues in respect of which the appeal is preferred. That obligation can be discharged until the appeal is considered for admission and/or condonation of delay in filing of the appeal, as the case may be, by the Appellate Authority for the first time. We are conscious of the fact that the first proviso pertaining to maximum period of delay to be condoned by the Appellate Authority, also uses the expression admit the appeal . That expression admit , however, must be read to mean filing, institution or presentation of the appeal in the office of the Appellate Authority. Whereas, the expression admitted used in the second proviso will have to be construed as analogous to expression entertained . We a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x assessed by the assessing authority and the tax admitted by the appellant for the relevant assessment year in respect of which the appeal has been preferred by the concerned appellant-assessee, warranting rejection of the appeal in terms of the second proviso of Section 19 and proviso of Section 21 (2) of the APGST Act, 1957 or second proviso of Section 31 and proviso of Section 33 (2) of the AP VAT Act, 2005. Similar position obtains regarding the provisions of Telangana State enactments. 3. The High Court dismissed the writ petitions filed by the concerned appellant following the decision of the coordinate bench of the High Court in Ankamma Trading Company Vs. Appellate Deputy Commissioner (CT), Guntur Anr. (2011) 44 VST 189 (AP) and other decisions taking the same view, despite the appellant pointing out to the High Court that the decision in Ankamma Trading Company (supra) has been impliedly overruled by the Supreme Court in M/s. Innovatives Systems, Rep. by its Managing Partner Vs. State of Andhra Pradesh, Rep. by Principal Secretary to Government Civil Appeal No.2230/2015 (arising out of SLP (C) No.1832/2015 decided on February 23, 2015). In that case, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er would come into play as exposited in Kunhayammed and Ors. Vs. State of Kerala and Anr. (2000) 6 SCC 359, wherein a three Judge Bench of this Court opined that once a special leave petition has been granted, the doors of the appellate jurisdiction of this Court have been let open and any order passed thereafter would be an appellate order and would attract the applicability of doctrine of merger. Further, it would not make a difference whether the order is one of reversal or of modification or of dismissal, or of affirming the order appealed against. It would also not make any difference if the order is a speaking or a nonspeaking one. 4. In addition, the appellant(s)assessee( s) have relied on the decisions of this Court in Ranjit Impex Vs. Appellate Deputy Commissioner and Anr. (2013) 10 SCC 655, which has had an occasion to deal with more or less similar provision, if not identically worded, being Section 51 of the Tamil Nadu VAT Act, 2006. Even there the provision contained stipulation such as the proviso of the provisions under consideration pertaining to State of Andhra Pradesh and State of Telangana. It is then urged that even the Division Bench of the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a case, the Appellate Authority would be obliged to admit the appeal if it deserves consideration on merits and the appellant-assessee cannot be nonsuited on the ground that the amount so paid is after the limitation period specified for filing of an appeal. 6. The respondent State, on the other hand, has supported the exposition in the case of Ankamma Trading Company (supra), and would urge that the view taken in the said decision is the only possible interpretation of the second proviso. In that, if the amount specified in the second proviso is not deposited within the period provided for filing an appeal and including for condonation of delay, such appeal would be inflicted with institutional defect and will have to be rejected on that count in light of the mandate contained in the proviso of the concerned provision. It is urged that the appellants have been illadvised to invoke doctrine of merger. According to the respondentState, on a bare perusal of the decision of this Court in M/s. Innovatives Systems (supra), and the other decisions passed following the same would clearly indicate that it has been passed in the fact situation of the concerned case. Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions obtain in the Telangana State Acts. Section 19 and 21 of the APGST Act, 1957 and Section 31 and 33 of the AP VAT Act, 2005, read thus: APGST Act, 1957 A.P. VAT Act, 2005 Section 19. Appeals.( 1) Any dealer objecting to any order passed or proceeding recorded by any authority under the provisions of the Act other than an order passed or proceeding recorded by an Additional Commissioner or Joint Commissioner, or Deputy Commissioner under subsection (4C) of section 14 may within thirty days from the date on which the order or proceeding was served on him, appeal to such authority as may be prescribed: Provided that the appellate authority may within a further period of thirty days admit the appeal preferred after a period of thirty days if he is satisfied that the dealer had sufficient cause for not preferring the appeal within that period: Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces proof of payment of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys specified in subsection (1), if it is satisfied that the dealer had sufficient cause for not preferring the appeal with that period. Provided that no appeal against the order passed under section 19 shall be admitted under subsection (1) or subsection (2), unless it is accompanied by satisfactory proof of the payment of fifty per cent of the tax as ordered by the Appellate Deputy Commissioner under section19: Provided further that no appeal against the order passed under subsection (2) of section 20 shall be admitted under subsection (1) or subsection (2), unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or in such instalments thereof as might have become payable as the case may be, and twenty five per cent of the difference of the tax ordered by the revisional authority under subsection (2) of section 20 and the tax admitted by the appellant: Provided also that the assessing authority shall refund the said amount of twelve and half per cent or twenty five per cent or fifty per cent of the difference of tax assessed by the assessing authority or revisional authority as the case may be and the tax admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r condonation of delay in filing of the appeal, as the case may be, by the Appellate Authority for the first time. We are inclined to take this view as even the High Court in Ankamma Trading Company (supra) had justly noted that the said proviso does not provide for any specific period within which the tax dues should be paid. Moreover, there is no express stipulation to deposit the tax dues in respect of which the appeal is preferred, at the time of its filing, institution or presentation as such. In the absence of such a clear stipulation, it must necessarily follow that it is open to the assessee to file the appeal within the statutory period of limitation provided therefor and later on, deposit the specified tax dues but before the appeal is taken up for consideration by the Appellate Authority for the first time be it for condonation of delay in filing the appeal and/or to admit it on merits or otherwise. The proof of such payment having been made could be produced thereat. Failing which, the Appellate Authority will have no other option but to reject the appeal on that count. The Appellate Authority has no power to extend the time to deposit the specified tax dues. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll established that once a special leave petition has been granted, the doors for the exercise of appellate jurisdiction of this Court have been let open. Resultantly, the order impugned before the Supreme Court became an order appealed against and any order passed thereafter would be an appellate order and attract the doctrine of merger despite the fact that the order is of reversal or of modification or of affirming the order appealed against and including is a speaking or nonspeaking one. This legal position has been restated in Kunhayammed (supra). Having said this, we must reject the argument of the respondentState that the decision of this Court in M/s. Innovatives Systems (supra), and other decisions following the same, cannot be considered as binding precedent. 12. In addition, the appellant-assessee has rightly placed reliance on the decision of this Court in Ranjit Impex (supra). In that case, the Court considered almost similar stipulation in Section 51 of the Tamil Nadu VAT Act, 2006. Indeed, the second proviso therein uses the expression no appeal shall be entertained , unlike the expression used in the provisions under consideration that the appeal so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire payment of tax dues referred to therein, at the time of filing, institution or presentation of the appeal but the proof of such payment has been made, is required to be produced before the Appellate Authority at the first hearing of the appeal; failing which the Appellate Authority would be well within its jurisdiction to reject it rather duty bound not to proceed with the appeal on merits and to reject the same at the threshold on the ground of an institutional defect. 15. For the view that we have taken, it is wholly unnecessary to deal with the other reported decisions relied upon by the parties or to deal with other arguments which have no bearing on the conclusion reached by us. 16. Reverting to the factual position in the appeals under consideration, admittedly, the appellant-assessee had deposited the specified tax dues before the date on which appeal preferred by them was taken up for consideration for the first time for admission on merits. In such a situation, the stated proviso becomes unavailable to reject the appeal on the ground of institutional defect. In this view of the matter, all these appeals must succeed. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 20. In view of the above, these appeals must fail and the same are therefore, dismissed. All pending applications are also disposed of. No order as to costs. Civil Appeal No.8452/2016 21. This appeal was analogously heard along with Civil Appeal No.7574/2014. In the present appeal, the State has challenged the judgment and order passed by the High Court in Writ Petition No.22337 of 2015 and, in particular, the liberty granted to the respondent (writ petitioner) to pay the requisite amount after expiry of the limitation period prescribed under Section 33 of AP VAT Act, 2005 and on such deposit being made, the Appellate Authority is directed to consider the appeal on merits. 22. The background in which such direction came to be issued, can be discerned from the appeal filed by the State. To wit, the respondent, who was dealing in works contracts and was registered under APGST Act, 1957, was assessed by the appropriate authority but that assessment was revised by the Commercial Tax Officer by passing a revision order dated 25th March, 2013. Against that decision, respondentassessee preferred appeal before the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercial Tax Officer passed an assessment order on 11th June, 2012. The appellant filed appeal against the said assessment order on 11th July, 2012. The appellant was called upon by the Appellate Authority vide communication dated 12th July, 2012 to make good the short payment of pre-deposit in the sum of ₹ 1,35,00,512/as also the institution fee. The appellant filed response to the said communication contending that there was input tax credit to the account of the appellant in the sum of ₹ 1080,01,63,420/and that amount would arise only in respect of the tax paid on taxable purchases effected within the State. Despite that factual aspect brought to the notice of the first Appellate Authority, it rejected the appeal for nonpayment of pre-deposit amount vide order dated 24th July, 2012. This was an exparte order. 27. The appellant then filed representation to the assessing authority for issuing tax credit certificate for giving necessary adjustments against the taxes payable for 04/2010 to 06/2011 and pointing out the order of the Tribunal dated 18th October, 2011 which was communicated long back but not implemented thus far. The appellant, therefore, submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if so done the appellant had complied with the precondition of deposit of twelve and a half percent (12.5%) of the amount in respect of which the appeal was filed by the appellant before the first Appellate Authority. Although, this plea was specifically taken before the Appellate Authority, the judgment of the Appellate Authority has not analysed the same at all. Instead, it proceeded to dismiss the appeal merely by relying on the exposition in Ankamma Trading Company (supra). Similarly, even the High Court after recording this argument of the learned counsel for the appellant, has not analysed the same and mechanically rejected the writ petition on the ground that appellant had failed to comply with the precondition of deposit. This approach of the High Court as well as of the first Appellate Authority is the subject matter of assail in the present appeal. 31. We have heard the counsel for the parties. As regards the legal position expounded in Ankamma Trading Company (supra), we have already answered the same in Civil Appeal No.7574/2014 decided today. That appeal was heard along with all connected matters. In the present case, however, the additional point whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt. 33. In that view of the matter, we deem it appropriate to set aside the impugned judgment and relegate the parties before the High Court for reconsideration of the Writ Petition No.837/2014 afresh on its own merits in accordance with law and including in light of decision of this Court in Civil Appeal No.7574/2014 decided today. All contentions available to both sides in the remanded writ petition are left open to be considered on its own merits and in accordance with law. 34. Accordingly, this appeal is allowed. The impugned judgment and order passed by the High Court dated 31st October, 2014 in Writ Petition No.837/2014 is set aside and instead the writ petition is restored to the file of the High Court for fresh consideration in light of the observations made hitherto. All contentions available to the parties are left open. All pending applications are also disposed of. No order as to costs. Civil Appeal No.10670/16 35. This appeal was heard analogously with Civil Appeal No.7574/2014. It has been preferred by the assessee. The respondent No.2 passed an order dated 24th February, 2015, levying a penalty under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected the appeal without taking notice of the prayer made by the appellant on oath that a tax credit of ₹ 10,67,683/is available to the appellant and that such credit has not been adjusted towards any other tax liability and can be adjusted towards the twelve and a half percent (12.5%) of disputed tax amount of ₹ 67,57,696/, which comes to ₹ 4,44,712/only. The order of the Appellate Authority, as communicated to the appellant, reads thus: The appeal petition along with stay petition (main appeal penalty appeal) are returned as the same are not in accordance in terms of second provision to sec.31(1) of read with Rule 38 of the AP VAT, 2005 for the reason. Provided further that an appeal so preferred shall not be admitted by the appellate authority concerned unless the dealer produces proof of payment of tax admitted to be due or of such instalments as have been granted and the proof of payment of 12.5% of the difference of the tax assessed and the tax admitted by the appellant, for the relevant tax period, in respect of which the appeal is preferred. Further they have not filled the challan for appeal fee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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