2025 (11) TMI 1323 - HC - GST

Tax appeal allowed subject to deposit of admitted dues and 25 percent disputed liability; delay in filing condoned

HC held that the petitioner had admitted tax liability of Rs. 3,65,918 out of a total demand of Rs. 9,99,558 and was disputing Rs. 6,33,640. Since only ... Rejection of appeal on the ground of time limitation - admission of part tax liability - HELD THAT:- As against the total tax liability of Rs. 9,99,558/-, the Petitioner has admitted the tax liability of Rs. 3,65,918/- in the Appeal filed before the 1st Respondent/Appellate Authority. Thus, effectively, the Petitioner is aggrieved by the Order insofar as the demand for a sum of Rs. 6,33,640/- (Rs.9,99,558/- - Rs. 3,65,918/-). The Petitioner deposited only a sum of Rs. 99,956/- out of Rs. 3,65,918/-. The Petitioner shall therefore deposit the balance amount of Rs. 2,65,962/- (Rs.3,65,918/- - Rs. 99,956/-), within a period of thirty (30) days from the date of receipt of a copy of this order - The Petitioner shall also deposit a sum of Rs. 1,58,410/- being 25% of the aforesaid disputed tax amount of Rs. 6,33,640/- (Rs.9,99,558/- - Rs. 3,65,918/-), in cash from the Petitioner's Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order. In case the Petitioner complies with the above stipulation, the 1st Respondent/Appellate Authority shall entertain the appeal and dispose of the same on merits after hearing the Petitioner without reference to the aspect of limitation - Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the Appellate Authority's dismissal of the appeal on the ground of limitation can be set aside or rendered otiose by the High Court subject to conditions. 2. Whether an appeal which admits a part of the tax liability can be entertained on merits if the petitioner deposits the balance of the admitted tax and a specified percentage of the disputed tax within a stipulated time. 3. The consequences of compliance or non-compliance with court-stipulated deposit conditions, including the effect on existing attachments. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Power to render a limitation-based dismissal otiose by conditional order Legal framework: The impugned administrative order dismissed the appeal solely on the ground of limitation. The Court exercised its supervisory jurisdiction to consider whether the appeal may be entertained notwithstanding limitation by imposing conditions. Precedent Treatment: No judicial precedents are referred to or applied in the judgment. Interpretation and reasoning: The Court did not reopen factual findings of limitation but provided a procedural pathway by which the Appellate Authority would entertain the appeal on merits if specified conditions were satisfied by the petitioner within a fixed timeframe. The Court treated the limitation dismissal as susceptible to being set aside (or rendered without consequence) by subsequent compliance with conditions imposed by the Court. Ratio vs. Obiter: Ratio - the Court's direction that an appeal dismissed for limitation may be entertained by the Appellate Authority if the court-stipulated conditions are complied with is central to the decision. No obiter propositions on limitation law were advanced. Conclusions: The Court held that the Appellate Authority's order of dismissal on limitation will not operate if the petitioner complies with the specified deposit conditions within thirty days; upon such compliance the Appellate Authority shall hear the appeal on merits without reference to limitation. Issue 2 - Conditions for entertaining an appeal where part admission of tax exists Legal framework: The petitioner had admitted a portion of the tax demand in the appeal. The Court imposed monetary conditions: (a) deposit within 30 days of the balance of the admitted tax after accounting for an earlier deposit; and (b) deposit 25% in cash of the disputed tax amount from the Electronic Cash Register. The Court linked entertainability of the appeal to compliance with these deposits. Precedent Treatment: No precedents cited or distinguished; the Court acted on the material and admissions before it. Interpretation and reasoning: The Court parsed the figures: total tax confirmed, amount admitted in appeal, amount already deposited, and thereby calculated the outstanding admitted tax to be deposited (balance of admitted tax) and fixed 25% of the disputed tax as the additional cash deposit. The Court required payment from the petitioner's electronic cash register for the 25% cash component. The Court conditioned relief on these stepped payments to balance revenue protection with the petitioner's right to have the appeal heard on merits. Ratio vs. Obiter: Ratio - the specific conditional arrangement (deposit balance of admitted tax and 25% of disputed tax within 30 days) is dispositive of the operative relief granted. The calculation method used (admitted tax minus prior deposit; 25% of disputed tax) constitutes the applied rule in this case; no general rule beyond this case was laid down. Conclusions: The petitioner must deposit Rs. 2,65,962 (balance of admitted tax) and Rs. 1,58,410 (25% of disputed tax) within thirty days. On compliance, the Appellate Authority shall entertain and decide the appeal on merits without reference to limitation. Issue 3 - Consequences of compliance or non-compliance, and effect on attachments Legal framework: The Court linked conditional relief to the status of attachment and the authorities' power to proceed in case of non-compliance. Precedent Treatment: No authorities or prior decisions addressed; the Court set the consequences on the facts. Interpretation and reasoning: The Court ordered that upon compliance with the stipulated deposits the existing attachment of the petitioner's bank account shall stand automatically vacated. Conversely, if the petitioner failed to comply within the prescribed time, the authorities were authorized to proceed as if the writ petition had been dismissed in limine (i.e., no relief granted), leaving the departmental measures and enforcement intact. Ratio vs. Obiter: Ratio - the conditional vacating of attachment on compliance and the permission to proceed on non-compliance are operative decrees of the Court. There are no ancillary observations that amount to obiter. Conclusions: Compliance effect - attachment to be vacated and appeal to be entertained on merits. Non-compliance effect - authorities may proceed in accordance with law as though the petition were dismissed. Cross-references and Practical Effect The conditions set out in Issue 2 directly determine the outcomes described in Issue 1 and Issue 3: (a) satisfying the deposit conditions removes the limitation bar for the purpose of appellate consideration; (b) satisfying the deposit conditions triggers automatic vacation of attachment; (c) failure to satisfy the deposit conditions results in restoration of the departmental position and leaves enforcement measures intact.