Outcome: Delay in filing the special leave petitions was condoned, and the special leave petitions were dismissed.

Issues: (i) Whether the penalty imposed under Section 47(6) of the Kerala Value Added Tax Act, 2003 was sustainable; (ii) Whether the assessment additions based on the penalty order could be sustained.

Issue (i): Whether the penalty imposed under Section 47(6) of the Kerala Value Added Tax Act, 2003 was sustainable.

Analysis: The consignment was accompanied by the invoice and checkpost declarations in Form 8F, and the statutory declaration in Form 16 was also produced to show that the goods were intended for the assessee's own use. The materials on record did not establish any trading activity or any intention to evade tax. In those circumstances, the requirements for sustaining the penalty were not made out.

Conclusion: The penalty was not sustainable and its cancellation was upheld in favour of the assessee.

Issue (ii): Whether the assessment additions based on the penalty order could be sustained.

Analysis: The additions in the assessment order rested entirely on the penalty order. Once the penalty itself was found unsustainable on the basis of the documents and surrounding facts, the consequential additions could not independently survive.

Conclusion: The assessment additions were not sustainable and their setting aside was upheld in favour of the assessee.

Final Conclusion: The Tribunal's order cancelling the penalty and the consequential assessment additions was maintained, and the revision petitions were dismissed.

Ratio Decidendi: Where valid transport documents and statutory declarations establish bona fide movement of goods for own use and there is no material showing intent to evade tax, a penalty under the KVAT Act and consequential assessment additions cannot be sustained.

Issues: Whether the Sales Tax Department could claim priority charge over the secured assets sold by the secured creditor under the SARFAESI Act, and whether the attachment orders issued against those assets could stand despite the Bank's prior CERSAI registration.

Analysis: The secured creditor had registered its security interest in CERSAI before the Sales Tax Department registered its claim. Section 26E of the SARFAESI Act confers priority on a secured creditor in payment over all other debts, revenues, taxes, cesses and rates, and operates notwithstanding anything contained in any other law. The Full Bench ruling applied by the Court held that where the security interest is duly registered, the secured creditor gets precedence over governmental dues, including sales tax dues, and attachment orders issued by the revenue authority cannot defeat that priority. The Court therefore treated the earlier CERSAI registration as ative of inter se priority.

Conclusion: The Sales Tax Department had no priority charge over the secured assets, and the attachment orders could not prevail against the secured creditor's rights.

Issues: Whether service of the assessment order by email was valid and whether the petitioner could be permitted to obtain a certified copy and file an appeal at the belated stage.

Analysis: The assessment year in question had already lapsed, the assessment order was stated to have been served through email, and the petitioner's first request for a certified copy was made only much later. Rule 64 of the Andhra Pradesh Value Added Tax Rules, 2005, as amended, recognised service by email as a valid mode of service. The plea that the email address had become inactive was not accepted, as the dealer was expected to keep the assessing authority informed of any change in the email address. The Court also found no basis to direct issuance of a certified copy merely to revive a limitation-barred appeal, and the reliance on the possibility of producing F Forms in appeal did not assist the petitioner at this stage.

Conclusion: Service by email was held to be valid, the request to facilitate a belated appeal was rejected, and the challenge failed.

Final Conclusion: The writ petition was dismissed, and the assessment order was not interfered with.

Ratio Decidendi: Where the governing rule recognises email as a valid mode of service, a dealer cannot avoid service or extend limitation merely by alleging that the email account had become inactive, and belated appellate relief cannot be granted to revive a time-barred challenge.

Issues: (i) Whether the impugned revision assessment orders were liable to be interfered with on the ground that the third parties were not produced for cross-examination; (ii) whether the matter called for partial relief by way of quashing the orders, remand for fresh consideration, and modification of the attachment order.

Issue (i): Whether the impugned revision assessment orders were liable to be interfered with on the ground that the third parties were not produced for cross-examination.

Analysis: The assessment records showed that summons had been issued to the three named persons through RPAD and that two summons were acknowledged, while one was returned with an endorsement that the addressee was not available at the address. The petitioner had sought a voluntary arrangement for cross-examination but did not take steps to produce the witnesses. The Court held that the Department could not be expected to summon the petitioner's witnesses and that, if produced by the petitioner, the Department would be entitled to cross-examine them.

Conclusion: The challenge based solely on non-production of the third parties for cross-examination was rejected.

Issue (ii): Whether the matter called for partial relief by way of quashing the orders, remand for fresh consideration, and modification of the attachment order.

Analysis: In view of the amount already deposited by the petitioner and the need to afford one further opportunity, the Court exercised its discretionary writ jurisdiction to grant limited relief. The impugned revision assessment orders were quashed and the matter was sent back for fresh orders on merits, subject to the petitioner producing the named persons as witnesses. The Court also directed further deposit in instalments and restricted the attachment to the balance tax due, with consequential disposal within a fixed time.

Conclusion: Partial relief was granted to the petitioner by quashing the impugned orders, remanding the matter for fresh adjudication, and limiting the attachment to the balance demand.

Final Conclusion: The writ petitions resulted in limited interference, with the assessments sent back for reconsideration on conditions and the attachment order correspondingly curtailed.

Ratio Decidendi: A writ court may decline to interfere on a complaint of denied cross-examination where the party failed to take steps to produce its own witnesses, while still granting conditional remand and ancillary relief in the interests of fair adjudication.

Issues: (i) Whether the Commercial Tax Tribunal could decide a second appeal on merits ex parte when the appellant failed to appear. (ii) Whether the impugned ex parte appellate order was liable to be set aside and the matter remitted for fresh decision.

Issue (i): Whether the Commercial Tax Tribunal could decide a second appeal on merits ex parte when the appellant failed to appear.

Analysis: The governing principle drawn from the Code of Civil Procedure is that where an appellant does not appear, the appeal is to be dismissed for default and not decided on merits. Although Rule 63(4) of the U.P. Value Added Tax Rules, 2008 permits an appeal to be heard and decided ex parte when proper service is effected and a party is absent, the term "ex parte" was read as referring to absence of the respondent and not as authorising a merits-based decision against an absent appellant. Deciding the appeal on merits in the appellant's absence was also inconsistent with the requirement of fair hearing and the rule of audi alteram partem.

Conclusion: The Tribunal could not lawfully decide the appeal on merits against the absent appellant and should have dismissed it for want of prosecution.

Issue (ii): Whether the impugned ex parte appellate order was liable to be set aside and the matter remitted for fresh decision.

Analysis: Since the Tribunal proceeded to determine the appeal on merits in the absence of the appellant, the order was held to be illegal and arbitrary. The Court accepted that the proper course was to set aside the ex parte merits order and restore the appeal before the Tribunal so that both sides could be heard. The Tribunal was also directed to decide the matter expeditiously after affording opportunity of hearing to the parties.

Conclusion: The impugned order was set aside and the matter was remitted to the Tribunal for fresh adjudication.

Final Conclusion: The revisionist obtained relief by way of setting aside of the Tribunal's ex parte merits order and restoration of the appeal for fresh consideration after hearing both sides.

Ratio Decidendi: Where an appellant is absent, a merits determination in appeal is impermissible unless the governing statute clearly authorises such course, and an ex parte disposal must conform to the requirements of fair hearing and natural justice.

Issues: Whether the Tribunal was justified in rejecting the application for recall and condonation of delay without considering the plea that the ex parte appellate order had not been communicated to the assessee and that the delay was attributable to non-service of the order.

Analysis: The dispute arose from an assessment for assessment year 2009-2010, where the second appeal had been decided ex parte and the assessee later moved for recall after obtaining a certified copy. The application specifically pleaded that the order had never been served as required under the Uttar Pradesh Value Added Tax Rules, and that the delay was explained by the absence of communication. The impugned order did not deal with these grounds in substance and merely rejected the application on the ground of lapse of time. Such rejection, without examining the reasons offered for the delay and the absence of service, amounted to non-application of mind. The reasoning adopted in the cited precedent supported the view that a tribunal has the power to set aside an ex parte order and re-hear the matter where a party was prevented from appearing or was otherwise denied a fair opportunity.

Conclusion: The rejection of the recall application was unsustainable and was set aside. The matter was remitted to the Tribunal to decide the application afresh in accordance with law.

Final Conclusion: The assessee succeeded in obtaining remand of the recall application for fresh adjudication, and the Tribunal was directed to decide it expeditiously.

Ratio Decidendi: A tribunal cannot reject a recall or delay-condonation request arising from an ex parte order without considering the explanation for non-service and the grounds showing sufficient cause; failure to do so renders the order vulnerable for non-application of mind and warrants remand.

Issues: Whether the assessment orders could be sustained when they introduced a residuary classification different from the classification proposed in the show-cause notice, and whether the availability of an alternate statutory remedy barred interference under Article 226.

Analysis: The assessment notices proposed classification under one entry, but the final assessment orders proceeded on a different residuary entry, thereby departing from the basis on which the assessee was called upon to respond. A notice must disclose the foundation of the proposed action so that the noticee can meet the exact case set up against it; a final order cannot travel beyond the notice and build a new case without prior intimation. Such a departure renders the proceedings vulnerable for breach of natural justice. The existence of an alternate remedy does not create an absolute bar where the impugned action is vitiated by violation of natural justice, since that is a recognised exception to the rule of alternate remedy.

Conclusion: The assessment orders could not be sustained in their present form because they were passed in breach of natural justice. The writ appeals were therefore allowed to the limited extent of modifying the relief and permitting objections to be filed against the impugned orders treated as show-cause notices.

Ratio Decidendi: An assessment order that proceeds on a classification or basis not disclosed in the show-cause notice is invalid for breach of natural justice, and the rule of alternate remedy does not bar writ relief in such a case.

Issues: (i) Whether the arbitral award granting the price of undelivered goods for the short-closed quantity was vitiated for want of proof of readiness to supply, absence of actual loss, and the purchaser's contractual option to short close within the permissible margin; (ii) Whether the award of VAT and additional VAT was barred by the contract and unsustainable in respect of goods not supplied; and (iii) Whether the award of interest was contrary to the contractual prohibition and therefore beyond the arbitrator's jurisdiction.

Issue (i): Whether the arbitral award granting the price of undelivered goods for the short-closed quantity was vitiated for want of proof of readiness to supply, absence of actual loss, and the purchaser's contractual option to short close within the permissible margin?

Analysis: The award granted the price of 2,596 items although those goods were never supplied. No sufficient evidence was discussed to show that the claimant had kept the materials ready at the relevant time. The claim of loss was also unsupported, and the record indicated that the claimant had stated it would be ready to supply the balance quantity only after four months. The contract further contained an option clause permitting the purchaser to take a short closure up to 30%, and the disputed quantity fell within that margin. In that situation, the purchaser could not be treated as having breached the contract by refusing to accept the balance quantity. The award on this component ignored the contractual framework and the requirement of proof of actual loss under the law of damages.

Conclusion: The award on the price claim was unsustainable and liable to be interfered with.

Issue (ii): Whether the award of VAT and additional VAT was barred by the contract and unsustainable in respect of goods not supplied?

Analysis: VAT is ordinarily levied on supplies actually made and collected in relation to goods supplied. Since the balance goods were not supplied at all, the basis for granting VAT on those goods was absent. The arbitral tribunal also overlooked the contractual denial clause, which barred benefit on account of statutory levy changes after expiry of the original delivery period. The supply period had been extended several times, and the VAT components related to a period beyond the original delivery period. The VAT awards therefore conflicted with the contract and lacked a factual foundation.

Conclusion: The VAT components of the award were barred by the contract and could not stand.

Issue (iii): Whether the award of interest was contrary to the contractual prohibition and therefore beyond the arbitrator's jurisdiction?

Analysis: The bid document contained an express bar that no claim would lie against the purchaser in respect of interest. Section 31(7) of the Arbitration and Conciliation Act, 1996 permits interest unless otherwise agreed by the parties. Here, the parties had expressly agreed to exclude such liability. The arbitrator was therefore bound by the contractual prohibition and could not award pendente lite or other interest contrary to that bar.

Conclusion: The interest component was contrary to the contract and beyond the arbitrator's authority.

Final Conclusion: The arbitral award was set aside in its entirety as the challenged components were found to be contrary to the contract, unsupported by proof of loss, and vitiated by patent illegality within the scope of judicial review under Section 34.

Ratio Decidendi: An arbitral award cannot survive judicial scrutiny when it grants relief beyond the contractual bargain, awards damages without proof of actual loss, or allows interest in the face of an express contractual prohibition.

Outcome: The Special Leave Petition was dismissed, and the pending application stood disposed of.

Issues: Whether the refund arising from the assessment for 2011-12 could be adjusted against the earlier demand for 2010-11 after the petitioner had already complied with the settlement scheme; and whether the bar on refund under the settlement scheme applied to the refund amount claimed by the petitioner.

Analysis: The petitioner had already paid the amount payable under the settlement scheme for 2010-11 before the refund adjustment order was issued. On that date, no outstanding demand survived for 2010-11 against which the refund for 2011-12 could lawfully be adjusted. The adjustment was therefore made without authority of law and was contrary to the scheme and the refund procedure under the MVAT Rules. The bar against refund under the settlement scheme applied only to the amount paid under that scheme, not to a separate refund already arising from the appellate order for 2011-12. Retention of the excess amount would also offend Article 265 of the Constitution of India.

Conclusion: The refund adjustment was illegal, and the petitioner was entitled to refund of the amount for 2011-12 with interest.

Issues: Whether the amount of Rs. 10,00,000/- deposited pursuant to the interim order was a security deposit or a payment, and whether the matter required reconsideration by the Tribunal regarding adjustment under the settlement scheme.

Analysis: The interim order directed release of the seized articles on furnishing security of Rs. 18,00,000/-, with Rs. 10,00,000/- to be deposited in cash and the balance by bank guarantee. The wording of the order showed that the amount was taken as security to safeguard the revenue pending adjudication and not as a substantive payment. In view of the doubts regarding what had actually been paid and what had merely been deposited, and in the absence of a clear factual determination on the effect of the penalty component under the settlement scheme, the matter required re-examination by the Tribunal.

Conclusion: The cash amount was held to be a security deposit and not a payment, and the issue was remitted to the Tribunal for fresh consideration of the related settlement and penalty questions.

Ratio Decidendi: An amount directed to be furnished as security for release of seized goods retains the character of a deposit and cannot be treated as payment unless the order or surrounding facts clearly show otherwise.

Issues: Whether the Tribunal was justified in condoning the delay in re-presenting the departmental appeal and whether the writ court should interfere with that order under Article 226 of the Constitution of India.

Analysis: The appeal had originally been filed within the condonable period under Section 58(1)(a) of the Tamil Nadu Value Added Tax Act, 2006, but was later re-presented after a substantial delay because of defects pointed out by the Tribunal. Regulation 7(3) of the Tamil Nadu Value Added Tax Appellate Tribunal Regulations, 2011 permits the Secretary to extend the period for remedying defects for sufficient cause, and the Court accepted the explanation that a substantial part of the delay overlapped with the Covid-19 lockdown period. The Court also noted the practical difficulties arising from litigation burden and administrative reorganisation in the post-GST period. No material was placed to dislodge the affidavit filed in support of the condonation application.

Conclusion: The Tribunal's order condoning the delay in re-presentation was upheld and no interference was called for under Article 226.

Ratio Decidendi: Where an appeal is initially filed within the statutory condonable period and defects are later cured after delay, the appellate authority may extend time for re-presentation on sufficient cause being shown, and writ interference is unwarranted absent demonstrable error in that satisfaction.

Issues: Whether penalty under Section 51(7)(b) of the Punjab Value Added Tax Act, 2005 was sustainable where the goods were voluntarily reported at the information collection centre and were covered by stock transfer documents showing undervalued particulars.

Analysis: The goods were reported at the information collection centre, and the record showed that they had been purchased against tax-paid invoices and were being moved as stock transfer for sales promotion purposes. The documents and accompanying material indicated that the transaction was not a sale in Punjab and that the declared value did not reflect an intention to evade tax. In the circumstances, the detaining authority was required to confine itself to the limited scope of proceedings under Section 51, and the record did not justify treating the matter as one involving concealment or tax evasion. The impugned penalty orders were therefore held to be unsustainable.

Conclusion: The penalty under Section 51(7)(b) could not be sustained, and the assessee succeeded.

Issues: Whether the order directing issuance of a refund voucher with interest under Section 24(4) of the TNGST Act was liable to be set aside in view of a subsequent revised order passed before disposal of the writ petition.

Analysis: A refund voucher had initially been issued on 01.06.2005, but a revised order was subsequently passed on 16.12.2005 before the writ petition was decided. The revised order recorded liability towards resale tax and penalty. That material circumstance was not placed before the Single Judge when the writ petition was allowed. In view of the subsequent revised order and the non-disclosure of that fact before the writ court, the earlier direction for refund with interest could not be sustained.

Conclusion: The order directing refund with interest was set aside and the appeal was allowed.