Statutory pre-deposit for tax appeals cannot be met by reversing provisional input tax credit.

An appeal under the Tamil Nadu Value Added Tax Act, 2006 could not be maintained without proof of payment of the tax admitted due and 25% of the disputed balance. Reversal of provisional input tax credit under Section 19(16) was not equivalent to payment of the statutory pre-deposit. Although the appeal had been numbered, the papers could be re-presented with the required 25% payment so the dispute could be heard and decided on merits.

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Issues: Whether reversal of input tax credit could satisfy the statutory requirement of payment of 25% of the disputed tax for maintaining the appeal under the second proviso to Section 52 of the Tamil Nadu Value Added Tax Act, 2006, and whether the appeal could be restored for decision on merits.

Analysis: The appeal under Section 52 of the Tamil Nadu Value Added Tax Act, 2006 could not be entertained unless accompanied by satisfactory proof of payment of the tax admitted to be due and 25% of the difference between the assessed tax and the admitted tax. The input tax credit relied upon by the petitioner was only provisional under Section 19(16) of the Tamil Nadu Value Added Tax Act, 2006, and the reversal of such credit could not be treated as payment of the statutory pre-deposit. At the same time, the appellate authority had already numbered the appeal and the petitioner was denied an effective opportunity to have the dispute decided on merits because of the procedural lapse.

Conclusion: The challenge to the order dismissing the appeal as not maintainable could not be accepted on merits, but the petitioner was permitted to re-present the appeal papers with payment of 25% of the disputed tax so that the appeal could be heard and decided on merits.

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