9911796707
TMI Blog2024 (2) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation cannot be invoked to seek deferment of payment stipulated under Clauses (a), (b) and (c), which will be necessary for the appellant authority to entertain the appeal as the statute is very clear that no appeal shall be entertained unless the appellate authority is satisfied that the payments required under Clauses (a), (b) and (c) have been made. Nothing prevented the petitioner from filing the return with the claim of nil liability towards the taxes by taking the plea that he was not liable to pay any tax, as all taxes were to be paid by the Principal Contractor and not by the petitioner. Thus, the above assessment order dated 29.03.2021 clearly shows that the petitioner assessee was given an opportunity to appear and produce relevant documents, and though a representative of the assessee petitioner had appeared, he failed to produce any such document or explain his position which is sought to be explained. Similarly, the assessee also failed to file the return showing absence of any liability to pay tax as per the terms and conditions of the contract and the Letter of Intent. The petitioner himself has to be blamed for the situation he finds himself now. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.2018 due to certain unavoidable reasons. Thus, the petitioner Company could execute work worth Rs. 2,83,212.12 only during the period 01.04.2017 to 07.07.2017. As far as the work done for period from 08.07.2017 till 10.10.2018 is concerned, it has been submitted that the Sale tax had been paid under new GST regime. According to the petitioner, apart from the work executed till 10.10.2018, the petitioner has no knowledge of the rest of the work dated 22.11.2017. In the letter of allotment of work by the Principal Company, it was clearly mentioned that TDS/any kind of taxes if applicable shall be deducted from the Bill thereby clearly indicating that it is the Principal Contractor, which would pay all kinds of taxes. Consequently, it has been claimed that the petitioner had no liability to pay any tax including GST for the aforesaid period and, hence, did not file the return. 05. The Assessing Authority, however, made the assessment for the aforesaid period vide Assessment Order dated 29.03.2021 considering the entire amount mentioned in the Letter of Intent of Rs. 11,47,54,334.95 as the total turnover for tax assessment purpose. The Assessing Authority also computed the tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clearly mentioned in the Letter of Allotment that the tax will be paid by the Principal Contractor and not by the petitioner- sub-contractor. Hence, if the petitioner is compelled to pay the aforesaid 5% of the assessment amount and 50% of the penalty, it will cause serious injustice to the petitioner. Accordingly, being aggrieved by the order dated 27.03.2023 passed by the Commissioner-respondent no. 2 declining to extend the date of payment and also directing the petitioner to comply with the provisions of Section 11(1) of the Act, the present petition has been filed assailing the said order. 08. This petition has been contested by the respondents contending inter alia that as per the statutory scheme there is no escape from the position that any assessee who wishes to file an appeal under Section 11 of the Act has to invariably deposit the necessary amount by making payment as stipulated under clauses (a), (b) and (c) to the second proviso to sub-section (1) of Section 11 of the Act without which no appeal shall be entertained. It has also been submitted that the present writ petition as well as the application filed by the petitioner before the Commissioner Sales Tax is mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the petitioner filed the appeal under Section 11 of the Act, which is meritorious, yet without fulfilling the requirement of the statute for depositing 20% of amount of tax assessed or the amount of tax admitted by the assessee, whichever is higher, the appellate authority cannot entertain the appeal. Similarly, in case of appeal against the imposition of penalty, unless 50% of penalty levied is paid, the appellate authority cannot entertain the appeal. This requirement of deposit by way of payment to activate any appeal under Section 11 of the Act cannot be waived or suspended or deferred by any order passed by the Commissioner as mentioned in the Explanation . 14. Explanation mentioned under sub-section (1) of Section 11 of the Act reads as under. Explanation: - Nothing in this sub-section shall apply to cases where the Commissioner in exercise of the power vested under section 8 makes an order extending the date of payment . 15. What the aforesaid Explanation to the Section 11(1) of the Act provides, in our view, is that the requirement as mentioned under sub-section (1) of Section 11 of the Act, i.e. (i) filing of appeal within thirty days, which can be exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent subject to such conditions including the payment of and interest under sub-section (2) and furnishing of a security, as the officer may consider necessary. (2) If the tax or any other amount [due under this Act excluding the interest] is not paid by the dealer or any other person, by whom it is payable within the period [allowed] the dealer or such other person shall be liable to pay interest on the tax or other amount from the date it was payable to the date of actual payment at the following rates:- a) If the default is for a period not exceeding six months at 2% per month; and (b) If the default is for a period exceeding six months at 3% per month: Provided that where, as a result of an order under sections 11, [11-A], 12, 24 or an order of the Court, the amount of tax or other sum on which interest was payable under this sub-section has been reduced, the interest shall be reduced accordingly and excess interest paid, if any, shall be refunded] (3) Quarterly tax shall be paid before furnishing a quarterly return but not later than the date prescribed under sub-section (2) of section 7. (4) Notwithstanding anything contained in sub-section (3) if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of actual payment at the rates prescribed in sub-section (2) of this section and the provisions of section 16 and section 16-A shall apply mutatis mutandis to the recovery thereof. 18. On the other hand, what Explanation to Section 11 (1) of the Act provides is that where the demand for payment of tax has been made under Section 8 of the Act, the period for such payment can be extended by an order by the Commissioner under Section 8 of the Act which by inference would mean that the assessee has opted not to challenge by way of an appeal the assessed amount but desires to pay the assessed amount within such extended period as may be determined by the Commissioner, in which event, the provisions of Sub-Section (1) of Section 11 of the Act relating to filing appeal including deposit of amount contemplated under Clauses (a) (b) and (c) to the 2nd proviso to Section 11(1) of the Act will not be applicable. 19. Thus, the power exercisable by the Commissioner as mentioned in the Explanation has to be understood in context of the powers conferred to the Commissioner under Section 8 of the Act, which is for extending the time for payment of the assessed amount. 20. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of demand or allow the assessee to pay the demand in installments subject to such conditions including the payment of interest and furnishing of security as provided under first proviso to Sub-section 1 of Section 8 of the Act. 24. However, if the assessee desires to contest the assessment of tax and any other money demanded under Section 8 of the Act by way of filing an appeal under Section 11 of the Act, the question of extending the date of payment of the assessed amount does not arise as there is no such provision under the Act for the same. If any application is made under Section 8 of the Act for extending the date of payment is made, the presumption is that the assessee is not intending to contest or challenge the assessment but to make payment by seeking the extension of time. It cannot be that by seeking extension of time for payment as provided under Section 8 of the Act, the requirement for deposit of amount as contemplated under Clauses (a), (b) and (c) to the third proviso Section 11 (1) of the Act, will not become inapplicable as contended by the petitioner. If the assessee desires to file an appeal on being aggrieved by assessment made and the demand made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a provision under the third proviso by the appellate authority to stay recovery of the disputes amount of tax and penalty for reasons to be recorded in writing. 27. In our opinion, Explanation to the third proviso to Sub-section (1) of Section 11 of the Act cannot be understood to mean that if the Commissioner passes an order under Section 8 of the Act for extending the time of payment, the deposit/ payment required to be made at the time of filing of the appeal can be waived or deferred. If that is so, the Legislature would have used the word Section 11 instead of Section 8 in the Explanation, in which event, Explanation would have read like this, Explanation: Nothing in the sub-section shall apply to cases where the Commissioner in exercise of the power vested under Section 11 makes an order extending the date of payment. Accordingly, the Commissioner in exercise of the power as the appellate authority under Section 11 of the Act could have extended the date of payment contemplated under Clauses (a), (b) and (c) of the second proviso to sub-section (1) of Section 11 of the Act. However, the Legislature has instead mentioned Section 8 of the Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions of the Contract and Letter of Intent dated 22.11.2017. Thus, it is the specific plea of the petitioner that he is not liable to pay any GST at all and if the petitioner had executed work for a paltry amount of Rs. 2,83,212.12, he cannot be saddled with such huge financial liability of Rs. 4,08,45,922.20 and to pay more than Rs. 26.00 lacs at the time of filing of appeal, which is not only absurd but will cause serious prejudice and injury to him and, as such, it would be in fitness of things that the requirement for deposit of amount mentioned under Clauses (a) and (c) of the 2nd proviso to Section 11(1) of the Act be deferred. 30. Though the aforesaid submission deserves consideration of this Court, on minute examination of the records, it however, appears that petitioner himself is responsible for the position he has placed himself in. It is seen from the order of the assessment dated 29.03.2021 passed by the Assessing Authority, Circle L Jammu, that the assessment proceedings were initiated by issuance of statutory notices in the form ST-17 followed by ST-65 and in response to said notices, one Sh. Sanjay Kanotra, (STP) a representative of the petitioner attended t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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