2024 (5) TMI 986 - HC - VAT and Sales Tax

High Court allows VAT appeal admission without 12.5% deposit under Section 31 when no amount admitted due

M/s. Ganesh Spices Versus Commercial Tax Officer and Others

M/s. Ganesh Spices Versus Commercial Tax Officer and Others - TMI Issues:1. Challenge to endorsement requiring payment of 12.5% of disputed tax for admission of appeal under Section 31 of AP VAT Act.2. Interpretation of Section 31(1) IIIrd proviso of AP VAT Act.3. Applicability of precedent in M/s. Sri Hari Maharalayam Company case.Detailed Analysis:1. The petitioner challenged an endorsement issued by the 2nd Respondent, seeking proof of payment of 12.5% of disputed tax for admission of appeal dated 6.2.2024. The petitioner sought the court to set aside the endorsement as illegal, arbitrary, and contrary to law. The petitioner argued that the endorsement was in violation of settled principles and requested the court to direct the 2nd Respondent to admit the appeal without insisting on the payment of 12.5% of the disputed tax. The petitioner contended that the requirement of depositing 12.5% did not apply as they were challenging the endorsement dated 26.04.2023 and not the assessment order.2. The interpretation of Section 31(1) IIIrd proviso of the AP VAT Act was crucial in this case. The provision states that an appeal shall not be admitted unless the dealer produces proof of payment of tax, penalty, interest, or any other amount due, and 12.5% of the difference of the tax admitted by the appellant. The court analyzed this provision and found that the petitioner was not required to pay any tax, penalty, or interest as per the endorsement being challenged. Therefore, the court concluded that there was no need for the petitioner to deposit 12.5% of the tax as mandated by the IIIrd proviso of Section 31(1) of the AP VAT Act.3. The court referred to the precedent set in the case of M/s. Sri Hari Maharalayam Company, where it was held that if an appeal is filed against an endorsement without a quantified tax amount, the insistence on payment of 12.5% of the disputed tax is untenable. The court concurred with the decision in the aforementioned case and directed the respondent to consider the admission of the appeal without requiring compliance with the IIIrd proviso of Section 31 of the AP VAT Act. Consequently, the court allowed the writ petition, set aside the impugned order, and instructed the respondent to entertain the appeal without insisting on the payment of 12.5% of the disputed tax. No costs were awarded, and pending miscellaneous petitions were closed as a result of the judgment.