2019 (2) TMI 1458 - HC - VAT and Sales Tax

High Court lacks jurisdiction to entertain revision under VAT Act while appeal pending at Tribunal. Emphasis on merits in waiver applications.

M/s Otis Elevators Company (India) Ltd. Thru. Auth. Signatory Versus State Of U.P. Thru. Prin. Secy. (Tax & Registration) & Anr.

The High Court held that it lacked jurisdiction to entertain a revision under Section 58 of the VAT Act while an appeal was pending before the Commercial ... Maintainability of revision petition under Section 58 of the VAT Act, 2008 - waiver of statutory deposit - appeal of the petitioner is still pending before the Commercial Tax Tribunal and it is only the application for waiver which has been disposed of - Held that:- This Court finds that the observation in the impugned order that the merits of the case is not required to be considered while disposing the application for waiver of the statutory deposit is not in tune with the Division Bench judgment referred by Shri Agarwal in ITC. LTD. VERSUS COMMISSIONER (APPEALS), CUS. & C. EX., MEERUT-I [2003 (10) TMI 70 - HIGH COURT OF JUDICATURE AT ALLAHABAD] - The Court has perused the said judgment and finds that the matter requires reconsideration by the Tribunal taking the said judgment into consideration which has not been done as yet. The impugned order is hereby quashed - application for waiver of the statutory deposit filed by the petitioner under Clause (b) of the second proviso of Section 57 sub-section 2 of the VAT Act, 2008 shall now be revived, reconsidered and decided by the Tribunal - petition allowed. Issues:1. Jurisdiction of the High Court to entertain a revision under Section 58 of the VAT Act, 2008.2. Correct legal premise for considering waiver application under Clause (b) of the second proviso of Section 57(9) of the Act, 2008.3. Application of precedents in deciding waiver applications.4. Discretion of the Tribunal in granting waiver of statutory deposit.5. Requirement to consider merits of the case while deciding on waiver application.Analysis:1. Jurisdiction of the High Court: The counsel for the petitioner argued that a revision under Section 58 of the VAT Act, 2008 would not be maintainable as the appeal was pending before the Commercial Tax Tribunal. The Court agreed, stating that a writ petition under Article 226 of the Constitution of India would be the appropriate remedy in such a situation, as per the provisions of Section 58(1) of the Act.2. Correct Legal Premise for Waiver Application: It was contended that the Tribunal erred in not considering the merits of the controversy while deciding on the waiver application under Clause (b) of the second proviso of Section 57(9) of the Act, 2008. The petitioner cited a Division Bench judgment emphasizing that the merits of the case must be taken into account while considering such applications. The Court agreed with this contention, finding that the Tribunal had not properly applied the law in this regard.3. Application of Precedents: The petitioner highlighted a previous judgment by the Supreme Court overruling a decision relied upon by the Appellate Authority. This indicated that the petitioner had a strong case on merits, which was not duly considered by the Tribunal. The Court acknowledged the importance of considering precedents and ensuring that the merits of the case are thoroughly evaluated in such matters.4. Discretion of the Tribunal: The Additional Chief Standing Counsel argued that the Tribunal had rightly exercised its discretion in granting only a 5% waiver of the statutory deposit. However, the Court found that the Tribunal's decision did not align with the legal principles outlined in the Division Bench judgment, necessitating a reconsideration of the matter.5. Requirement to Consider Merits: The Court emphasized that the merits of the case should be a crucial factor in deciding on waiver applications. The Tribunal's failure to consider the merits, as per the relevant legal precedents, led to the quashing of the impugned order. The Court directed the Tribunal to reconsider the application for waiver with due regard to the legal principles discussed in the judgment.In conclusion, the High Court allowed the writ petition, quashed the impugned order, and directed the Tribunal to reconsider the petitioner's application for waiver of the statutory deposit within a specified timeframe, ensuring that the merits of the case are duly taken into account.