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TMI Blog2024 (9) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 788 - SUPREME COURT] considered a separate set of provisions, however, we do not agree with the learned State counsel that merely because under Section 33 (5) of the HVAT Act the requirement is not of actual deposit but submitting a bank guarantee or adequate security to the satisfaction of the assessing officer. The provision has to be read differently. While such a provision may exist on the statute, the circular issued asking for irrevocable bank guarantee or security in the form of surety bond is too onerous a condition. This Court is satisfied that the petitioners before us would not be in a position to submit security in the nature of surety bond as in all the cases the company or the concerned Directors would be required to have property worth the said amount which they do not possess. A person cannot be left remediless, and in view thereto, as opined in M/s Tecnimont Private Limited and Smt. P. Laxmi Devi [ 2019 (9) TMI 788 - SUPREME COURT] the Joint Excise and Taxation Commissioner (Appeals), Faridabad, is directed to hear the appeals without insisting upon the pre-condition required under Section 33 (5) of the HVAT Act and decide the appeals on merits. Since the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner -M/s Anand Rathi Commodities International Private Limited has filed the certificate of its net worth, as certified by the Chartered Accountant for the various years as at March 31, 2018 upto as at March 31,2023. The same is extracted as under:- Particulars As at March 31, 2023 (unaudited) As at March 31, 2022 (unaudited) As at March 31, 2021 (unaudited) As at March 31, 2020 (unaudited) As at March 31, 2019 (unaudited) As at March 31, 2018 (unaudited) Equity Paid up share capital 1,05,000 1,05,000 1,05,000 1,05,000 1,05,000 1,05,000 Add: Security Premium - - - - - - Add: Reserves and Surplus 23,79,992 37,45,007 45,11,696 48,74,990 39,78,143 52,60,843 Total 24,84,992 38,50,007 46,16,696 49,79,990 40,83,143 56,65,843 4. Learned Senior counsel for the petitioner has relied on M/s Tecnimont Private Limited (supra) to submit that while the concerned appellate authorities may not have the powers available to grant exemption from the precondition under Section 33 (5) of the HVAT Act but this Court can pass appropriate orders considering the financial position of the petitioner company. 5. Learned counsel for the petitioner has also relied on Supreme Court judgments in Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19985, 19995 and 20385 of 2019 have sought quashing of orders dated 30.06.2016 passed by the Joint Excise and Taxation Commissioner (Appeals), Faridabad whereby the appeal of the petitioners was not entertained on account of non-furnishing of adequate security and order dated 21.05.2019 passed by the Haryana Tax Tribunal, Chandigarh, whereby their second appeal against the order dated 30.06.2016 was also dismissed. 10. The counsel appearing for the petitioners in other connected cases has also stated that the net worth of the petitioner-companies is much less than the demand raised and they would not be in a position to submit either the bank guarantee or security in the form of surety bonds in terms of the circular dated 25.07.2014. He adopted the arguments of learned senior counsel in CWP No. 20059 of 2019. However, he does not press the prayer for challenging Section 33 (5) of the HVAT Act keeping in view the law as laid down by the Apex Court in M/s Tecnimont Private Limited (supra). 11. In CWP No. 19985 of 2019, an affidavit has been filed by Ms. Asha Rani Jindal, Director of the petitioner-company-SKS Overseas Private Limited stating that she is house wife in old age and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit of the disputed amount but even the same could be done only on furnishing of bank guarantee or adequate security to the satisfaction of the Appellate Authority. It is submitted that the provision is very reasonable and the object is to protect the interest of the assessee and also safeguard the revenue of the State. With regard to the department notification dated 25.07.2014, learned State counsel submitted that although it was mentioned that irrevocable bank guarantee equivalent to the additional demand preferably to be demanded, which means it is not mandatory. Otherwise, the securities in the form of surety bonds can be accepted. Further, the instructions do not have precedence over the provisions of the Act. 17. We have considered the submissions. Section 33 (5) of the HVAT Act provides as under:- No appeal preferred by an assesse to an appellate authority shall be entertained unless it is filed within sixty days from the date of the order appealed against. The appellate authority shall ensure before entertaining the appeal that the appellant has paid the amount of tax admitted to be due and interest thereon, and a bank guarantee or adequate security to the satisfaction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 39 (5) of the Haryana General Sales Tax Act, 1973 reads as under:- Provided that the said authority, if satisfied that the person is unable to pay the whole of the amount of tax assessed, or the penalty imposed, or the interest due, he may, if the amount of tax and interest admitted by the appellant to be due has been paid, for reasons to be recorded in writing, entertain the appeal and may stay the recovery of the balance amount subject to the furnishing of a bank guarantee or adequate security in the prescribed manner to the satisfaction of the appellant authority. 21. In M/s Tecnimont Private Limited (formerly known as Technimont ICB Private Limited) vs State of Punjab and others (2021) 12 SCC 477, the Supreme Court was examining the powers of the appellate authority in granting relaxation of pre-deposit and held that such power was not available with the appellate authority, however, it observed as under:- 20. It is true that in cases falling in second category as set out in para 12.2 hereinabove, where no discretion was conferred by the statute upon the appellate authority to grant relief against requirement of pre-deposit, the challenge to the validity of the provision c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamp Act by declaring the demand arbitrary. It is well settled that arbitrariness violates Article 14 of the Constitution vide Maneka Gandhi v. Union of India . Hence, the party is not remediless in this situation. 23. In view of the above, we hold that while power does not lie with the appellate authority to waive the condition of pre-deposit of surety bond or bank guarantee in terms of Section 33 (5) of the HVAT Act, however, this Court is not precluded under Article 226 of the Constitution of India to direct the appeal to be heard without insisting upon the precondition. 24. It is true that the Supreme Court in M/s Tecnimont Private Limited (supra) considered a separate set of provisions, however, we do not agree with the learned State counsel that merely because under Section 33 (5) of the HVAT Act the requirement is not of actual deposit but submitting a bank guarantee or adequate security to the satisfaction of the assessing officer. The provision has to be read differently. We are of the firm view that while such a provision may exist on the statute, the circular issued asking for irrevocable bank guarantee or security in the form of surety bond is too onerous a condition. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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