2019 (5) TMI 362 - HC - VAT and Sales Tax

Court Upholds 25% Tax Deposit Rule, Dismisses Appeals on Input Tax Credit and Compliance

The High Court dismissed the appeals, upholding the requirement for the appellant to deposit 25% of the additional tax demand within two months. The court ... Compliance with the pe-deposit for maintainability of appeal - HELD THAT:- The appellant was required to pre-deposit 25% amount of the additional demand of tax liability as directed by the DETC(A) and the Tribunal as a condition precedent for hearing of the appeal, which was reasonable and justified - No illegality or perversity could be pointed out by the learned counsel for the appellant in the findings recorded by the Tribunal which may warrant interference by this Court. No question of law arises in the appeals. Appeal dismissed. Issues:1. Delay in refiling VATAP-234-20182. Justification of directing appellant to deposit 25% of tax3. Reversal of Input Tax Credit on purchase tax4. Reversal of Input Tax Credit on retention of bye products by Rice Millers5. Dismissal of appeal by Tribunal for non-compliance with pre-deposit requirementDelay in Refiling VATAP-234-2018:The High Court condoned a delay of 38 days in refiling VATAP-234-2018. The facts and issues in both appeals were deemed identical, leading to a consolidated judgment.Justification of Directing Appellant to Deposit 25% of Tax:The appellant challenged the order directing them to deposit 25% of the additional tax demand within two months. The High Court found no merit in the appeal, upholding the requirement for the appellant to make the pre-deposit as directed by the authorities.Reversal of Input Tax Credit on Purchase Tax:The appellant procured paddy from farmers and supplied it to rice millers for milling. The Assessing Authority raised a demand on account of reversal of Input Tax Credit (ITC) accrued on purchase tax and excess ITC claimed by the appellant. The appellant's appeal was dismissed for failure to comply with the pre-deposit requirement under Section 62(5) of the Act.Reversal of Input Tax Credit on Retention of Bye Products by Rice Millers:The Assessing Authority raised a demand on account of reversal of ITC on closing stock of paddy and on bye products retained by the rice miller. The appellant's appeal was dismissed by the Tribunal for non-compliance with the pre-deposit requirement, as mandated by Section 62(5) of the Act.Dismissal of Appeal by Tribunal for Non-Compliance with Pre-Deposit Requirement:The Tribunal dismissed the appellant's appeal for failure to deposit 25% of the additional demand within the stipulated time. The High Court upheld the requirement for pre-deposit, deeming it reasonable and justified. No legal errors were found in the Tribunal's decision, leading to the dismissal of the appeals.In conclusion, the High Court dismissed the appeals, finding no merit in the challenges raised by the appellant. The requirement for pre-deposit as directed by the authorities was upheld, and no legal grounds for interference were identified. Applications for condonation of delay in filing the appeals were disposed of accordingly.