Pre-deposit waiver discretion under Gujarat VAT law must be considered; dismissal without ruling on waiver was unsustainable.

Under the Gujarat VAT regime, an appellate authority must consider a pending request for waiver of pre-deposit under the proviso to section 73(4) and record reasons if it grants or refuses relief. The ordinary rule requires proof of tax payment for entertaining an appeal, but the proviso permits discretion to waive payment, require a lesser sum, or accept security. Here, the appeal was dismissed for non-production of proof of payment and non-appearance without addressing the waiver application that had been specifically raised. The dismissal was therefore unsustainable, and the appeal was to be restored with waiver of pre-deposit.

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Issues: Whether the appellate authority was justified in dismissing the appeal for want of pre-deposit despite a pending request for waiver under the proviso to section 73(4) of the Gujarat Value Added Tax Act, 2003, and whether the appeal was liable to be restored with waiver of pre-deposit.

Analysis: Section 73(4) makes production of proof of tax payment the ordinary rule for entertainment of an appeal against an assessment order, but its proviso expressly confers discretion on the appellate authority to entertain the appeal without payment of tax with penalty, on payment of a smaller sum, or on furnishing security. Where a request for waiver is made, the authority must apply its mind to that request and record reasons for granting or refusing it. In the present case, the request for complete waiver was specifically brought to the notice of the appellate authority, along with the binding decision relied upon by the petitioner, yet the appeal was dismissed only for non-production of proof of payment and non-appearance, without addressing the waiver application. The petitioner had therefore made out a prima facie case for exercise of the statutory discretion in favour of waiver.

Conclusion: The dismissal of the appeal for non-payment of pre-deposit was unjustified, the impugned orders were unsustainable, and the petitioner was entitled to waiver of pre-deposit and restoration of the appeal.

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