Under Section 26(6A) appellant must deposit aggregate amounts including 10% of disputed tax; prior protest payments count

SC held that under Section 26(6A) the appellant must deposit the aggregate amounts specified, including 10% of the tax disputed; where the entire demand is disputed, 10% of the whole disputed tax must be deposited. A payment made earlier under protest prior to assessment may be taken into account in determining compliance with the pre-deposit requirement. The High Court's rejection was set aside and the appeal restored to the appellate authority, subject to verification that the appellant has in fact deposited 10% of the disputed tax as interpreted by the Court.

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Issues:
Whether amounts deposited under protest prior to an assessment order can be adjusted against mandatory pre-deposit for filing an appeal under Section 26(6A) of the Maharashtra Value Added Tax Act 2002 (MVAT Act).

Analysis:
The appellant, a public limited company, engaged in the manufacture and sale of products, faced an investigation by the Sales Tax Department resulting in a tax demand. The appellant made protest payments before an assessment order was issued, leading to a dispute over whether these amounts could be adjusted against the mandatory pre-deposit required for filing an appeal under Section 26(6A) of the MVAT Act.

The introduction of Sections 26(6A), 26(6B), and 26(6C) into the MVAT Act mandated a pre-deposit for filing appeals. The appellant's appeal against the assessment order was rejected by the appellate authority, leading to a legal challenge regarding the adjustment of the amounts paid under protest against the total tax liability.

The interpretation of Section 26(6A) was crucial in determining whether the appellant was required to deposit 10% of the total tax demand after adjusting the amount paid under protest. The appellant argued that 10% of the disputed tax amount needed to be deposited along with the appeal, while the State of Maharashtra contended that 10% of the tax demanded post-assessment had to be paid.

The Supreme Court analyzed the statutory provisions strictly and concluded that 10% of the entire disputed tax liability had to be deposited as per Section 26(6A). The Court emphasized that the amount paid under protest could not be excluded unless explicitly provided for in the statute. Quoting Justice Bhagwati, the Court highlighted the need for strict interpretation of taxing statutes without room for intendment.

The Court overturned the High Court's decision, emphasizing that the appellant complied with the statutory requirements by considering the amount paid under protest. The appeal was allowed, setting aside the High Court's judgment and restoring the case to the appellate authority for verification that the required deposit had been made in accordance with the Court's interpretation of Section 26(6A).

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