2012 (1) TMI 134 - HC - VAT and Sales Tax

Court upholds dismissal of tax revision cases, stresses procedural compliance under APGST Act.

Swastic Oleachems Ltd. Versus State of AP.

The court upheld the dismissal of the tax revision cases, emphasizing the importance of complying with procedural requirements under the APGST Act. The ... Disputed tax under the second proviso to section 19(1) of the said Act not paid - Whether the petitioner can take shelter under the order of the Commissionerate of Industries in sanctioning the incentive (sales tax deferment)? Held that:- In this case, the petitioner/dealer did not comply with the second proviso while filing appeal before the ADC and, therefore, the order of the ADC and the order of the STAT upholding the former cannot be faulted. Except fettering the discretion of the appellate authority in the matter of admitting the appeal for further hearing the amendment has not brought in any major change. Therefore even if the dispute is with regard to the assessment year 2001-2002 as the petitioner filed appeal only on July 12, 2005 the law as on that date must be applied and the argument of the non-applicability of the amended provision cannot be countenanced. Furthermore the petitioner, in these cases, has annexed the revised final eligibility certificate fixing eligibility for sales tax deferment issued by the Commissionerate of Industries. Clause 11 (ii) thereof categorically makes the incentive subject to the condition that, 'the sales tax incentive should be utilized for the deferment of industry only and should not be utilized for any other purpose'. Therefore, the plea of the petitioner that by reason of incentives sanctioned to them the disputed tax deemed to have been paid and, therefore, the condition that the proviso to section 19(1) of the APGST Act stands waived is misconceived and cannot be accepted. The STAT has also considered this aspect and, in our considered opinion, came to correct conclusion. Appeal dismissed. Issues:1. Appeal rejection for non-compliance with procedural requirements under APGST Act and CST Act.2. Compliance with second proviso to section 19(1) of the APGST Act.3. Applicability of the second proviso to the petitioner's case.4. Effect of the order of the Commissionerate of Industries on sales tax deferment.Issue 1:The petitioner, a registered dealer under the APGST Act and CST Act, filed appeals before the Appellate Deputy Commissioner, which were rejected for not complying with mandatory procedural requirements. Subsequent appeals before the Sales Tax Appellate Tribunal (STAT) were dismissed, leading to the filing of tax revision cases against the orders.Issue 2:The petitioner failed to produce proof of payment of 12.5% of disputed tax while filing appeals before the ADC, as required by the second proviso to section 19(1) of the APGST Act. The court emphasized that to be a valid appeal, it must be filed within 30 days and accompanied by the necessary proof of payment.Issue 3:The petitioner argued that the amended second proviso to section 19(1) of the APGST Act, effective from November 30, 2001, should not apply to their case concerning the assessment year 2001-2002. However, the court held that the law in force at the time of filing the appeal must be applied, rejecting the petitioner's contention.Issue 4:Regarding the order of the Commissionerate of Industries sanctioning sales tax deferment, the court ruled against the petitioner's claim that the disputed tax was deemed paid due to the incentive. The court highlighted that the incentive was subject to specific conditions and could not be utilized for purposes other than industry deferment, thus dismissing the tax revision cases.In conclusion, the court dismissed the tax revision cases, upholding the rejection of the appeals for non-compliance with procedural requirements and emphasizing the necessity of adhering to statutory conditions for filing appeals under the APGST Act.