High Court modifies VAT Tribunal's order on interest payment for appeal pre-deposit, eases financial burden

The Delhi High Court modified the Delhi VAT Appellate Tribunal's order regarding delayed payment of interest on a pre-deposit required for an appeal. The appellant was directed to deposit a sum of &8377; 10 lacs within four weeks instead of paying 15% interest for the delayed period. The Court found the imposition of interest as an additional barrier causing hardship and allowed the appeal partly under the revised terms.

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Issues: Delayed payment of interest on pre-deposit required by Delhi VAT Appellate Tribunal (DVAT).

In the judgment delivered by the Delhi High Court, the appellant raised a substantial question of law regarding the order of the DVAT related to delayed payment of interest on the pre-deposit required for the appeal. The DVAT had initially directed the appellant to make a payment of &8377; 2.61 crores as a pre-condition for the appeal hearing, which the appellant failed to comply with promptly. The Tribunal later ordered the appellant to pay 15% interest for the delayed period. The appellant argued that this order was harsh and caused hardship, emphasizing that the pre-deposit requirement should not act as a barrier to the appeal's disposal on merits. On the contrary, the Revenue's counsel contended that since the appeal was pending, the appellant had to adhere to the order, and the imposition of 15% interest on belated payment was justified. The Court analyzed Section 76(4) and concluded that while the Tribunal had the power to waive pre-deposit partially or fully, the direction to pay 15% interest acted as an additional barrier and caused hardship. Consequently, the Court modified the Tribunal's order, directing the appellant to deposit &8377; 10 lacs within four weeks for the appeal to be heard, instead of paying 15% interest. The appeal was partly allowed under these revised terms.

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