2016 (6) TMI 949 - HC - VAT and Sales Tax

High Court Quashes Tribunal Orders, Directs Independent Appeal Review

The High Court quashed the Tribunal's orders and directed the Appellate Authority to independently decide the appeal, considering the reduced pre-deposit ... Waiver of pre-deposit - Input Tax Credit - genuineness of purchases - GVAT - Held that:- Tribunal while passing impugned order has required the appellant to deposit a sum of ₹ 1.02 crores. The apellant had first approached the Appellate Authority who had also dismissed the appeal on pre-deposit and not on merits. Considering such factsand other relevant aspects of the matter, we find that pre-deposit requirement of more than ₹ 1.02 crores is excessive. - the appellant has already deposited ₹ 25,00,000/- before the Government. - The appellant company is directed to deposit an amount of ₹ 50 lacs with the department within a period of six weeks from today and upon such deposit, the Deputy Commissioner, Commercial Tax is directed to hear and dispose of the appeal of the appellant on its own merits - Decided partly in favor of appellant. Issues:Challenging VAT Tribunal's orders dated 19.10.2015 and 2.12.2015 for pre-deposit requirements and dismissal of appeals.Detailed Analysis:Issue 1: Challenging Tribunal's OrdersThe appellant filed Tax Appeals challenging VAT Tribunal's orders dated 19.10.2015 and 2.12.2015. The appellant, a public limited company engaged in manufacturing solar systems, received a work order for a solar power plant. The appellant claimed VAT credit for goods sold by registered dealers but faced a substantial demand from the tax department. The Deputy Commissioner dismissed the appeal for not fulfilling the pre-deposit condition, leading to a Second Appeal before the Tribunal.Issue 2: Pre-Deposit RequirementThe Tribunal directed the appellant to deposit Rs. 1.02 crores as a pre-deposit within a month, which was not fulfilled. Subsequently, the Tribunal dismissed the appeals on 2.12.2015 due to non-compliance. The appellant argued that the pre-deposit amount was excessive, especially considering the Rs. 25 lakh already paid under protest. The High Court acknowledged the excessive pre-deposit and ordered the appellant to deposit Rs. 50 lakhs within six weeks for a fair hearing of the appeal on its merits.Issue 3: Disposal of AppealsThe High Court quashed the Tribunal's orders and directed the Appellate Authority to decide the appeal independently, considering the Rs. 50 lakh deposit as a pre-deposit. The Court emphasized expeditious disposal of the appeal, ensuring justice is served without influence from the Tribunal's observations. The High Court's decision aimed to address the appellant's concerns regarding the pre-deposit amount and ensure a fair hearing of the appeal.