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TMI Blog2022 (5) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is required to be accompanied by satisfactory proof of payment of admitted tax in full and ten per centum of the tax or interest or both, in dispute and that appeal under the OET Act is required to be accompanied by satisfactory proof of payment of admitted tax in full and twenty per centum of the tax or interest or both, in dispute. In THE BENGAL IMMUNITY COMPANY LIMITED VERSUS THE STATE OF BIHAR AND OTHERS [ 1955 (9) TMI 37 - SUPREME COURT] , the Hon ble Supreme Court has observed that if there is any hardship, it is for the Parliament to amend the law, but the Court cannot be called upon to discard the cardinal rule of interpretation for mitigating a hardship. If the language of an Act is sufficiently clear, the Court has to give effect to it, however, inequitable or unjust the result may be. As is said, dura lex sed lex which means the law is hard but it is the law . Even if the statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal enactment must be interpreted in its plain and literal sense as that is the first principle of interpretation. Since statutory deposits as discussed in the foregoing paragraphs were not made, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vely pertaining to the tax periods from 01.04.2012 to 30.09.2015 under assessment for entertainment of appeals. 3. The petitioner, M/s. Sumanshree Decoratives, dealing in cement, M.S. rod, marble, granite, chequered tiles, cadapah stone, etc. unfurls the fact by way of writ petition that the assessments under Section 43 of the OVAT Act and Section 10 of the OET Act were undertaken pursuant to report submitted by the Deputy Commissioner of Sales Tax, Vigilance, Koraput Division, Jeypore and without affording due and reasonable opportunity to the petitioner the opposite party No.2 raised huge demands which stand as follows: OVAT Act OET Act Tax Rs. 52,58,588.00 Rs. 7,65,936.00 Penalty Rs. 1,05,17,176.00 Rs. 15,31,872.00 Total Rs. 1,57,75,764.00 Rs. 22,97,808.00 3.1. The petitioner challenging the assessment orders dated 30.05.2017 passed under Section 43 of OVAT Act and Section 10 of the OET Act approached this Court by way of filing writ being W.P.(C) Nos.25347 of 2017 and 25345 of 2017 which came to be disposed of vide Order dated 02.01.2019. Relevant portion of Order dated 02.01.2019 in W.P.(C) No.22136 of 2017 is extracted herein below: "***Since the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of summary rejection of appeals being carried in revision by the petitioner before the Commissioner of Sales Tax-opposite party No.1, no fruitful purpose was served. The Commissioner of Sales Tax-revisional authority referring to Jindal Stainless Ltd. Vrs. State of Odisha, (2012) 54 VST 1 (Ori), held that "when the statute prescribes a mandatory pre-deposit for the appeal to be admitted; it needs to be complied with" and consequently, refused to interfere with the orders of the appellate authority. 4. Mr. Mukesh Agarwal, learned counsel for the petitioner urged that neither the appellate authority nor the revisional authority did consider material placed on record. The authorities-opposite parties ought not to have rejected the merits of the appeal at the altar of defect or deficiency. The financial stress of the business that is continuing to be prevailed should have been taken into consideration. Furthermore COVID-19 Pandemic has made the situation still worse affecting the livelihood of the proprietor. Hardship in complying with the statutory provision when pitted against merit of the case, the authorities-opposite parties are required to prefer the latter; or else the rigidi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. 26. For the reasons stated above, the decisions relied upon by the petitioner are of no help to the petitioner as those decisions are rendered in respect of particular facts of that case. 27. In view of the above, we are of the considered view that the provisions of Section 77(4) of the OVAT Act requiring deposit of 20% of the tax or interest or both in dispute as a precondition for entertaining an appeal against the order enumerated under Section 77(1) of the OVAT Act does not make the right of appeal illusory and such a condition is within the legislative power of the State Legislature and cannot be held to be unreasonable and violative of Article 14 of the Constitution." 8. Before proceeding further in the matter it is relevant to gloss through the relevant provisions of the statutes which are reproduced hereunder: Section 77 of the OVAT Act as it stands by virtue of the Odisha Value Added Tax (Amendment) Act, 2017 Section 16 of the OET Act (4) No appeal against any order shall be entertained by the appellate authority, unless it is accompanied by satisfactory proof of payment of admitted tax in full and ten per centum of the tax or interest or both, in dispute. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal may not be absolute. The Legislature can put conditions for maintaining the same. In Vijay Prakash D. Mehta & Jawahar D. Mehta Vrs. Collector of Customs (Preventive), Bombay, AIR 1988 SC 2010, the Hon'ble Apex Court held as under: "Right of appeal is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant... If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of these conditions that the right becomes vested and exercisable to the appellant... The purpose of the section is to act in terrorem to make the people comply with the provisions of law." 8. Similar view has been reiterated by the Hon'ble Apex Court in Anant Mills Co. Ltd. Vrs. State of Gujarat, AIR 1975 SC 1234; and Shyam Kishore & Ors. Vrs. Municipal Corportation of Delhi & Anr., AIR 1992 SC 2279; Gujarat Agro Industries Co. Ltd. Vrs. Municipal Corporation of the City of Ahmedabad & Ors., AIR 1999 SC 1818. In Shyam Kishore (supra) the Hon'ble Supreme Court placed reliance upon it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute. If Legislature in its wisdom has imposed certain conditions, like pre-deposit for the purpose of filing or hearing of the appeal, the Courts are supposed to give strict adherence to the statutory provisions. The purpose of imposing the pre-deposit condition is that right of appeal may not be abused by any recalcitrant party and there may not be any difficulty in enforcing the order appealed against if ultimately it is dismissed. There must be speedy recovery of the amount of tax due to the authority." 9.3. Such consistent approach can be traced out in recent Judgment being ECGC Limited Vrs. Mukul Shriram EPC JV, 2022 SCC OnLine SC 184. 9.4. Conspectus of aforesaid Judgment suggests that on the date of entertainment of appeals the provisions as they stand would apply. 10. Be that be, the Hon'ble Supreme Court in the case of Tecnimont Pvt. Ltd. Vrs. State of Punjab, 2019 SCC OnLine SC 1228 examined the issue that even though Mohammed Kunhi, (1969) 2 SCR 65 laid down that an express grant of statutory power carries with it, by necessary implication, the authority to use all reasonable means to make grant effective, can such incidental or implied power be drawn and invoked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the observations in deciding the case on its own merits. It is also submitted that after demand of tax and penalty being served on the petitioner-dealer, the petitioner has made certain deposits with the Department towards OVAT and OET. 11.1. Counsel for the petitioner has submitted that it has deposited certain amounts after demands being raised in the assessments and prayed for consideration of the same towards discharge of pre-deposit. 11.2. In VVF (India) Limited Vrs. State of Maharashtra and others, 2021 SCC OnLine SC 1202, the Hon'ble Supreme Court of India has been pleased to direct for consideration deposits made on protest towards discharge of amount of pre-deposit. The Court observed as follows: "11. While analyzing the rival submissions, it is necessary to note, at the outset, that, under the provisions of Section 26(6A), the aggregate of the amounts stipulated in the sub-clauses of the provision has to be deposited and proof of payment is required to be produced together with the filing of the appeal. Both clauses (b) and (c) employ the expression "an amount equal to ten per cent of the amount of tax disputed by the appellant". The entirety of the undispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax disputed together with the filing of the appeal. There is no reason why the amount which was paid under protest, should not be taken into consideration. It is common ground that if that amount is taken into account, the provisions of the statute were duly complied with. Hence, the rejection of the appeal was not in order and the appeal would have to be restored to the file of the appellate authority, subject to due verification that 10 per cent of the amount of tax disputed, as interpreted by the terms of this judgment, has been duly deposited by the appellant." 11.3. On the same principle, the petitioner in the present case is entitled to adjust amounts paid after demands being raised in the assessments. The petitioner is at liberty to deposit 10% of the tax in dispute under the OVAT Act and 20% of the tax in dispute under the OET Act on or before 30th April, 2022 subject to adjustment of such deposits which are claimed to have been made after demands of tax and penalty pursuant to Assessment Orders dated 30.05.2017 are raised. In the event of such deposits being made by the petitioner in terms of Section 77(4) of the OVAT Act and Section 16(4) of the OET Act, the appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being satisfied with the revision order of the Commissioner, the dealers do also approach the Hon'ble High Court for a favourable order. Therefore, in order to avoid unnecessary litigations, it is hereby advised that First Appellate Authorities, while disposing stay applications of dealers pertaining to VAT, CST and ET demands, should not insist on payment of tax, interest or penalty beyond the mandatory pre-deposit amount. Accordingly, stay applications should be disposed of quickly (grant of stay on the balance demand, as applied by the dealer, will not require any hearing) and time thus saved should rather be utilized for expeditious disposal of first appeal cases in the larger interest of revenue as well as the dealers. This communication is purely of advisory nature." On the fact and in the circumstances of the instant case, the appellate authority, while entertaining the appeal under the OET Act, or the recovery officer, as the case may be, therefore, need not insist for more than what is deposited in terms of Section 16(4) of the OET Act during the pendency of the appeal. 11.7. Subject to satisfaction of the conditions enumerated above, the appeals under the OVAT Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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