2023 (11) TMI 519

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....the appeals as the appellant failed to pay the amount of pre-deposit ordered by the Tribunal vide order dated 14.09.2022 for the above period. 4. For all the three years, the appellants have preferred six Tax Appeals, one under the Gujarat Value Added Tax Act and one under the Central Sales Tax Act. 5. For the sake of convenience Tax Appeal No. 594 of 2023 is treated as a lead matter wherein the appellant has raised the following substantial questions of law: "6.(iii)(a) it fails to take into consideration and take proper cognizance of the various documentary evidences placed before it; (b) it fails to take cognizance of the fact that even on merits of the appellant's case no amount is required to be paid by the appellant in the facts and the circumstances of the case; (c) it fails to consider and adjudicate upon the grounds challenging the gross violation of principles of natural justice which includes failure of the lower authorities to appreciate and examine the evidences on record. In fact, the Adjudicating Authority passed an order without considering the documentary evidences placed on record and Dy. Commissioner (Appeals) dismissed the ma....

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....ond Appeal No. 25 and 26 of 2020 however, the appellant paid determining the pre-deposit amount of Rs. 3,00,000/- which was paid by the appellants. 10. Learned advocate Ms. Parikh for the appellant submitted that due to financial difficulties the appellant could not pay the aforesaid pre-deposit amount of Rs. 42,00,000/- as directed by the Tribunal and therefore the Tribunal by the impugned judgment and order dated 23.01.2023 dismissed the Second Appeal Nos. 27 to 32 of 2020. 11. It was submitted that there is a prima-facie case in favour of the appellant for all the three years and the Tribunal ought to have determined the amount of pre-deposit reasonably considering the fact that the business of the appellant is closed since April 2016. 12. Learned advocate Ms. Parikh would point out from the Assessment Order that the Assessing Officer has determined the liability of the appellant to pay the tax without considering the fact that the entire turnover of the appellant was interstate and inspite of that the Tax is levied under the VAT Act and therefore there is a very good prima facie case in favour of the appellant. 13. It was submitted that the appellant produced all th....

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....r: "73(4). No appeal against an order of assessment shall ordinarily be entertained by an appellate authority, unless such appeal is accompanied by satisfactory proof of payment of the tax in respect of which an appeal has been preferred: [Provided that an appellate authority may, if it thinks fit, for reasons to be recorded in writing, entertain an appeal against such order- (a) without payment of tax with, penalty (if any) or, as the case may be, of the penalty, or (b) on proof of payment of such smaller sum as if may consider reasonable, or (c) on the appellant furnishing in the prescribed manner, security for such amount as the appellate authority may direct.]" 9. The aforesaid provision apparently makes it clear that ordinarily no appeal against an order of assessment shall be entertained by the appellate authority, unless an appeal is accompanied by satisfactory proof of payment of tax in respect of which an appeal has been preferred. The proviso to clause 4 makes the picture further clear. The said proviso explicitly gives discretion to the appellate authority to entertain an appeal against the orders as provided under cl....

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.... incumbent upon the Tribunal to examine the prima facie case and thereafter, to arrive at the decision with regard to insistence of payment of pre-deposit for entertainment of appeal. This Court has time and again in identical cases has held that Tribunal is obliged to consider a prima facie case, which the appellant may be in position to highlight. It a strong prima facie case is made out, then in such circumstances, there should not be any difficulty in entertaining the appeal even without insisting for payment of tax penalty or even smaller amount. 13. In light of the aforesaid facts, we find that the Tribunal committed serious error of law by not taking note of the prima facie case of the writ applicant while examining the aspect of payment of pre-deposit. Therefore, we are of the view that in the facts and circumstances of the case, the order passed by the Tribunal dated 22.11.2021 is hereby quashed and set aside. We further direct the Tribunal to hear the matter on merits so far as the issue of grant of stay pending appeal is concerned, taking into consideration the Circulars issued by the CBDT bearing No. 1914, dated 02.02.1993 as modified by instructions dated 29.0....