Conditional restoration of appeal after ex parte assessment, with coercive recovery stayed pending merits hearing.

An ex parte assessment under the Gujarat Value Added Tax Act, 2003 was challenged on the basis that the assessee had not been given an effective opportunity to contest it. The High Court balanced the right to pursue the appeal against revenue protection by directing conditional restoration of the appeal on deposit of Rs. 5,00,000. On deposit, the appellate authority was to restore the appeal to its original file and hear it on merits in accordance with law. The department was also restrained from insisting on transfer of the larger amount covered by the recovery notice, and coercive recovery was kept in abeyance to that extent.

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Issues: Whether the assessee should be granted an opportunity to challenge the ex parte assessment order by restoration of the appeal on deposit of a sum directed by the Court, and whether coercive recovery should be kept in abeyance meanwhile.

Analysis: The assessment had been made ex parte under the Gujarat Value Added Tax Act, 2003, and the assessee had been denied an effective opportunity to contest the matter. The Court considered it appropriate to afford one more chance to pursue the challenge, balanced against the need to secure the revenue by requiring a deposit of Rs.5,00,000/-. On such deposit, the appellate authority was directed to restore the appeal to its original file and hear it on merits in accordance with law. Consistently, the department was restrained from insisting on transfer of the larger amount sought under the recovery notice and the assessee was permitted to utilise that amount.

Conclusion: The assessee was granted conditional relief by restoration of the appeal and suspension of coercive recovery to that extent, while the appellate authority was directed to decide the appeal on merits.

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