The argument of the respondent proceeds that the decision
in M/s. Innovatives Systems (supra), neither refers to any
specific provision nor has it expressly over turned the decision of
the Division Bench of the High Court in Ankamma Trading
Company (supra). Thus, it cannot be considered as a binding
precedent. We are not impressed by this submission. Indeed, the
decision of this Court in M/s. Innovatives Systems (supra), is a
brief judgment. That, however, would make no difference. For, it
is well established that once a special leave petition has been
granted, the doors for the exercise of appellate jurisdiction of this
Court have been let open. Resultantly, the order impugned before
the Supreme Court became an order appealed against and any
order passed thereafter would be an appellate order and attract
the doctrine of merger despite the fact that the order is of reversal
or of modification or of affirming the order appealed against and
including is a speaking or nonspeaking
one. This legal position
has been restated in Kunhayammed (supra). Having said this,
we must reject the argument of the respondentState
that the
decision of this Court in M/s. Innovatives Systems (supra), and
other decisions following the same, cannot be considered as
binding precedent.
(REPORTABLE)
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7574 OF 2014
M/S. S.E. Graphites Private Limited Vs State of Telangana
A.M. Khanwilkar, J.
Dated:July 10, 2019.
1. Leave granted in SLP (C) No.6880 of 2019.
2. These Civil Appeals emanate from the orders passed by the
Appellate Authority rejecting the appeal preferred by the
concerned appellant(s) under the provisions of APGST Act, 1957
2
or AP VAT Act, 2005 or Telangana State VAT Act, 2005, as the
case may be, on the ground that the appellantassessee
had
failed to comply with the precondition
of producing proof of
payment of tax admitted to be due or of such installments as may
have been granted and/or the proof of payment of twelve and a
half percent (12.5%) of the difference of the tax assessed by the
assessing authority and the tax admitted by the appellant for the
relevant assessment year in respect of which the appeal has been
preferred by the concerned appellantassessee,
warranting
rejection of the appeal in terms of the second proviso of Section
19 and proviso of Section 21 (2) of the APGST Act, 1957 or
second proviso of Section 31 and proviso of Section 33 (2) of the
AP VAT Act, 2005. Similar position obtains regarding the
provisions of Telangana State enactments.
3. The High Court dismissed the writ petitions filed by the
concerned appellant following the decision of the coordinate
bench of the High Court in Ankamma Trading Company Vs.
Appellate Deputy Commissioner (CT), Guntur & Anr.1 and
other decisions taking the same view, despite the appellant
1 (2011) 44 VST 189 (AP)
3
pointing out to the High Court that the decision in Ankamma
Trading Company (supra) has been impliedly overruled by the
Supreme Court in M/s. Innovatives Systems, Rep. by its
Managing Partner Vs. State of Andhra Pradesh, Rep. by
Principal Secretary to Government2. In that case, this Court
after clearly noting that the High Court had relied upon the
judgment and order passed by the Division Bench of the same
High Court [in Ankamma Trading Company (supra)] to dismiss
the writ petition preferred by the appellant, yet proceeded to
allow the appeal filed by the appellant therein by setting aside the
decision of the High Court. The appellant in that case had filed
appeal within limitation period but deposited the twelve and a
half percent (12.5%) of the difference of the tax assessed by the
assessing authority in respect of which the appeal was preferred
after the expiry of the limitation period specified in the first
proviso of the concerned provision. This Court, nevertheless, held
that the appellant having deposited the stipulated amount of
twelve and a half percent (12.5%) as directed by the Appellate
Deputy Commissioner (CT), the High Court ought to have
condoned the delay in complying with the direction given by the
2 Civil Appeal No.2230/2015 (arising out of SLP (C) No.1832/2015 decided
on February 23, 2015).
4
Appellate Authority in that regard and thus restored the appeal
with a direction to the Appellate Authority to decide the appeal on
merits. Relying on the subsequent decisions of this Court in M/s.
IOT Infrastructure & Energy Services Ltd., Rep. by its
Deputy Manager (Accounts) Vs. State of Andhra Pradesh
Rep. by its Principal Secretary to Government3 and M/s.
Ranisati Trading Co. Rep. by its Managing Partner Vs.
Commercial Tax Officer, Gajuwaka Circle, Visakhapatnam
and Ors.4, it is urged by the appellantassessee
that the High
Court ought not to have disregarded those decisions on the
specious ground that the same cannot be treated as a binding
precedent and purportedly having been passed in exercise of
plenary powers under Article 142 of the Constitution of India.
Inasmuch as, looking at the decision in M/s. Innovatives
Systems (supra) of this Court, there is hardly any doubt that the
effect of the said order is to impliedly overrule the principle
enunciated by the Division Bench of the High Court in
Ankamma Trading Company (supra) or other decisions
following the same. For, this Court had unmistakably shown
3 (Civil Appeal No.12077/2016 decided on 14.12.2016)
4 (Civil Appeal No.5339/2017 decided on 17.04.2017)
5
inclination to apply its mind to the merits of the said order before
it having granted leave to appeal against the same albeit it had
disposed of the matter by a brief judgment. Thus, additionally,
the doctrine of merger would come into play as exposited in
Kunhayammed and Ors. Vs. State of Kerala and Anr.5,
wherein a threeJudge
Bench of this Court opined that once a
special leave petition has been granted, the doors of the appellate
jurisdiction of this Court have been let open and any order
passed thereafter would be an appellate order and would attract
the applicability of doctrine of merger. Further, it would not make
a difference whether the order is one of reversal or of modification
or of dismissal, or of affirming the order appealed against. It
would also not make any difference if the order is a speaking or a
nonspeaking
one.
4. In addition, the appellant(s)assessee(
s) have relied on the
decisions of this Court in Ranjit Impex Vs. Appellate Deputy
Commissioner and Anr.6, which has had an occasion to deal
with more or less similar provision, if not identically worded,
being Section 51 of the Tamil Nadu VAT Act, 2006. Even there
5 (2000) 6 SCC 359
6 (2013) 10 SCC 655
6
the provision contained stipulation such as the proviso of the
provisions under consideration pertaining to State of Andhra
Pradesh and State of Telangana. It is then urged that even the
Division Bench of the High Court in the case of Ankamma
Trading Company (supra), in paragraph 25 has taken note of
the fact that the proviso of the concerned section does not
specifically mention the time within which such proof of payment
is to be produced but then went on to rely on the first proviso
dealing with the period of limitation within which the appeal is
required to be filed and the maximum period of delay which could
be condoned by the Appellate Authority, to hold that the deposit
specified in the second proviso should also be paid within such
time only. Else, it went on to hold that the Appellate Authority is
obliged to reject the appeal or in other words, not admit the
same.
5. The appellants would urge that there is well recognized
distinction between the factum of filing, institution and
presentation of the appeal and the factum of “entertaining” the
appeal or consideration thereof for admitting the same on merits.
If the provision had expressly stated that the “appeal when filed”
should be “accompanied with” the receipt or proof of payment of
amount referred to in the second proviso, the interpretation
commended to the High Court could be sustained. However, the
High Court itself having recognized the fact that no specific
mention is made about the time within which such proof of
payment is to be produced, the corollary thereof is that the proof
of payment is required to be produced by the assessee on the
“first date of hearing” of the appeal for admission or
consideration thereof on merits. The appellant has also relied on
couple of reported decisions to contend that the right of appeal,
though, it does not inhere in the party, but once such remedy is
provided then it cannot be whittled down by giving strict
interpretation to the second proviso. However, the just approach
would be to read the expression “not to be admitted” as “not to be
entertained” if
the dealer failed to produce proof of payment of
tax dues as per the second proviso of the concerned provision.
The thrust of the argument is that in cases where the appellantassessee
has already paid the requisite amount referred to in the
second proviso of the concerned provision, before the appeal is
taken by the Appellate Authority/Court for the “first time for
consideration” after its filing in the office of the Appellate
8
Authority, that will be substantial compliance of the second
proviso. In such a case, the Appellate Authority would be obliged
to admit the appeal if it deserves consideration on merits and the
appellantassessee
cannot be nonsuited
on the ground that the
amount so paid is after the limitation period specified for filing of
an appeal.
6. The respondentState,
on the other hand, has supported the
exposition in the case of Ankamma Trading Company (supra),
and would urge that the view taken in the said decision is the
only possible interpretation of the second proviso. In that, if the
amount specified in the second proviso is not deposited within
the period provided for filing an appeal and including for
condonation of delay, such appeal would be inflicted with
institutional defect and will have to be rejected on that count in
light of the mandate contained in the proviso of the concerned
provision. It is urged that the appellants have been illadvised
to
invoke doctrine of merger. According to the respondentState,
on
a bare perusal of the decision of this Court in M/s. Innovatives
Systems (supra), and the other decisions passed following the
same would clearly indicate that it has been passed in the fact
9
situation of the concerned case. Notably, this Court has not
interpreted the provisions under consideration or for that matter
explicitly overturned the principle expounded by the Division
Bench in Ankamma Trading Company (supra). Whereas, a bare
reading of the provision makes it amply clear that it is a
mandatory provision. Failure to comply with the stipulation in
the second proviso would inevitably denude the Appellate
Authority from entertaining the same or so to speak, admitting
the same on merits. Heavy reliance has been placed on the
decision in the case of M/s. Lakshmi Rattan Engineering
Works Ltd. Vs. Asst. Commr. Sales Tax, Kanpur & Anr.7,
wherein this Court was called upon to interpret Section 9 of the
relevant enactment. As per that provision, no appeal against an
assessment shall be entertained unless it is accompanied by
satisfactory proof of the payment of the tax amount admitted by
the appellant to be due. The exposition in this decision, according
to the respondentState,
would admit of no other interpretation of
the second proviso as is held by the Division Bench of the High
Court in Ankamma Trading Company (supra). In that, the
Appellate Authority cannot exercise power to admit the appeal
7 (1968) 1 SCR 505
10
beyond the statutory period and since the predeposit
is
quintessence, the requirement of predeposit
within the
maximum period of limitation for filing the appeal including, for
condoning the delay in filing the same, would have bearing on the
second proviso of the concerned provision. Reliance is also placed
on the decision in Narayan Chandra Ghosh Vs. UCO Bank and
Ors.8, which has had an occasion to interpret the purport of
Section 18 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Securities Interest Act, 2002 wherein
the Court noted that there is an absolute power to entertain an
appeal under Section 18 of the Act unless the condition
precedent, as stipulated, is fulfilled. The respondentState
would,
thus, contend that the deposit even if made by the assessee
before the rejection of the appeal (for noncompliance
of the precondition
in terms of the proviso of the concerned provision), will
be of no avail to the assessee.
7. We have heard the learned counsel for the parties. At the
outset, we deem it apposite to reproduce the relevant provisions
of the APGST Act, 1957 and AP VAT Act, 2005. Almost identical
provisions obtain in the Telangana State Acts. Section 19 and 21
8 (2011) 4 SCC 548
11
of the APGST Act, 1957 and Section 31 and 33 of the AP VAT Act,
2005, read thus:
“APGST Act, 1957 A.P. VAT Act, 2005
Section 19. Appeals.(
1) Any dealer
objecting to any order passed or
proceeding recorded by any
authority under the provisions of
the Act other than an order passed
or proceeding recorded by an
Additional Commissioner or Joint
Commissioner, or Deputy
Commissioner under subsection
(4C) of section 14 may within thirty
days from the date on which the
order or proceeding was served on
him, appeal to such authority as
may be prescribed:
Provided that the appellate
authority may within a further
period of thirty days admit the
appeal preferred after a period of
thirty days if he is satisfied that the
dealer had sufficient cause for not
preferring the appeal within that
period:
Provided further that an appeal so
preferred shall not be admitted by
the appellate authority concerned
unless the dealer produces proof of
payment of tax admitted to be due,
or of such instalments as have been
granted, and the proof of payment of
twelve and half per cent of the
difference of the tax assessed by the
assessing authority and the tax
admitted by the appellant, for the
relevant assessment year, in respect
of which the appeal is preferred.
21. Appeal to the Appellate
Tribunal.(
1) Any dealer objecting to
an order passed or proceeding
recorded31.
Appeal to Appellate authority.(
1) Any VAT dealer or TOT dealer or
any other dealer objecting to any
order passed or proceeding recorded
by any authority under the
provisions of the Act other than an
order passed or proceeding recorded
by an Additional Commissioner or
Joint Commissioner or Deputy
Commissioner may, within thirty
days from the date of which the
order or proceeding was serve on
him, appeal to such authority as
may be prescribed:
Provided that the appellate
authority may within a further
period of thirty days admit the
appeal preferred after a period of
thirty days if he is satisfied that the
VAT dealer or TOT dealer or any
other dealer had sufficient cause for
not preferring the appeal within that
period:
Provided further that an appeal so
preferred shall not be admitted by
the appellate authority concerned
unless the dealer produces proof of
payment of tax admitted to be due,
or of such instalments as have been
granted, and the proof of payment of
twelve and half per cent of the
difference of the tax assessed by the
authority prescribed and the tax
admitted by the appellant, for the
relevant tax period, in respect of
which the appeal is preferred.
33. Appeal to the Appellate
Tribunal.(
1) Any dealer objecting to
an order passed or proceeding
recorded12
(a) by any prescribed authority on
appeal under section 19, or
(b) by an Additional Commissioner
or Joint Commissioner or Deputy
Commissioner suo motu under
subsection
(4C) of section 14 or
under subsection
(2) of section
20, may appeal to the Appellate
Tribunal within sixty days from
the date on which the order or
proceeding was served on him.
(2) The Appellate Tribunal may
within a further period of sixty days
admit the appeal after the period of
sixty days specified in subsection
(1), if it is satisfied that the dealer
had sufficient cause for not
preferring the appeal with that
period.
Provided that no appeal against the
order passed under section 19 shall
be admitted under subsection
(1)
or subsection
(2), unless it is
accompanied by satisfactory proof of
the payment of fifty per cent of the
tax as ordered by the Appellate
Deputy Commissioner under
section19:
Provided further that no appeal
against the order passed under subsection
(2) of section 20 shall be
admitted under subsection
(1) or
subsection
(2), unless it is
accompanied by satisfactory proof of
the payment of the tax admitted by
the appellant to be due or in such
instalments thereof as might have
become payable as the case may be,
and twenty five per cent of the
difference of the tax ordered by the
revisional authority under subsection
(2) of section 20 and the tax
admitted by the appellant:
(a) by any authority prescribed, on
appeal under section 31, or
(b) by the Additional Commissioner,
or Joint Commissioner or
Deputy Commissioner under
section 21 or 32 or 38; or
(c) by any authority following the
ruling or order passed under
section 67;
May appeal to the Appellate
Tribunal within sixty days from the
date on which the order or
proceeding was served on him.
(2) The Appellate Tribunal may
within a further period of sixty days
admit the appeal preferred after the
period of sixty days specified in subsection
(1), if it is satisfied that the
dealer had sufficient cause for not
preferring the appeal within that
period:
Provided that no appeal against the
order passed under section 31 shall
be admitted under subsection
(1)
or subsection
(2) of this section
unless it is accompanied by
satisfactory proof of the payment of
fifty per cent of the tax, penalty,
interest or any other amount as
ordered by the appellate authority
under section 31.”
13
Provided also that the assessing
authority shall refund the said
amount of twelve and half per cent
or twenty five per cent or fifty per
cent of the difference of tax assessed
by the assessing authority or
revisional authority as the case may
be and the tax admitted and paid by
the appellant, with simple interest
calculated at the rate of 18 per cent
per annum if the refund is not made
within 60 days from the date of
receipt of the order passed under
section 19 or section 21.
(emphasis supplied)
8. These provisions have been interpreted by the Division
Bench of the High Court in the case of Ankamma Trading
Company (supra). We are essentially concerned with the second
proviso of Section 19 and Section 31 of the respective enactment;
and first proviso of Section 21(2) and Section 33(2) of the
respective enactment. Upon reading the Section under
consideration as a whole, it is evident that the first proviso in the
concerned Section (Section 19 and Section 31, as the case may
be) pertains to limitation period “for filing” of an appeal; and
discretion of the Appellate Authority to condone the delay in filing
of such appeal, up to a maximum period specified therein.
Indeed, the second proviso is part of the same Section. However,
it is an independent condition and in one sense, mutually
exclusive condition mandating or enjoining the appellant to
14
produce proof of payment of tax dues in respect of which the
appeal is preferred. That obligation, in our opinion, can be
discharged until the appeal is considered for admission and/or
condonation of delay in filing of the appeal, as the case may be,
by the Appellate Authority for the first time. We are inclined to
take this view as even the High Court in Ankamma Trading
Company (supra) had justly noted that the said proviso does not
provide for any specific period within which the tax dues should
be paid. Moreover, there is no express stipulation to deposit the
tax dues in respect of which the appeal is preferred, at the time of
its filing, institution or presentation as such. In the absence of
such a clear stipulation, it must necessarily follow that it is open
to the assessee to file the appeal within the statutory period of
limitation provided therefor and later on, deposit the specified tax
dues but before the appeal is taken up for consideration by the
Appellate Authority for the first time – be it for condonation of
delay in filing the appeal and/or to admit it on merits or
otherwise. The proof of such payment having been made could be
produced thereat. Failing which, the Appellate Authority will have
no other option but to reject the appeal on that count. The
15
Appellate Authority has no power to extend the time to deposit
the specified tax dues.
9. Suffice it to observe that, stricto sensu, the said proviso is
not a provision of predeposit
at the stage of filing, institution or
presentation of the appeal as such; but is a provision stipulating
payment of tax dues as a prerequisite
or sine qua non for
consideration of appeal on merits or otherwise and/or for
condonation of delay in filing the same, as the case may be, for
the first time. If we may say so, it is also to impose fetter on the
Appellate Authority from admitting the appeal for consideration
on merits. It is well recognized that filing, institution or
presentation of appeal in the office of the Appellate Authority is
an independent event than the appeal being taken up for
consideration “for the first time” for being admitted on merits or
otherwise and/or for condonation of delay in filing it, as the case
may be. There is no reason to interpret the stated proviso in any
other manner lest, inevitably, it would result in rewriting
the
same and entail in doing violence to the legislative intent.
Presumably, this Court in M/s. Innovatives Systems (supra),
and other decisions rendered following the same, therefore, was
16
persuaded to allow the appeal preferred by the assessee and to
relegate the parties before the Appellate Authority for
consideration of the appeal for admission on merits.
10. Concededly, this Court was conscious of the decision in
Ankamma Trading Company (supra). In that, the judgment
under challenge before it in the concerned appeal was founded on
the view already taken by the coordinate bench of the same High
Court [including in Ankamma Trading Company (supra)]. It
has been so recorded by this Court. In that sense, the legal
position expounded in Ankamma Trading Company (supra),
stood impliedly overruled, even though that decision has not
been adverted to or expressly overruled by this Court.
11. The argument of the respondent proceeds that the decision
in M/s. Innovatives Systems (supra), neither refers to any
specific provision nor has it expressly over turned the decision of
the Division Bench of the High Court in Ankamma Trading
Company (supra). Thus, it cannot be considered as a binding
precedent. We are not impressed by this submission. Indeed, the
decision of this Court in M/s. Innovatives Systems (supra), is a
brief judgment. That, however, would make no difference. For, it
is well established that once a special leave petition has been
granted, the doors for the exercise of appellate jurisdiction of this
Court have been let open. Resultantly, the order impugned before
the Supreme Court became an order appealed against and any
order passed thereafter would be an appellate order and attract
the doctrine of merger despite the fact that the order is of reversal
or of modification or of affirming the order appealed against and
including is a speaking or nonspeaking
one. This legal position
has been restated in Kunhayammed (supra). Having said this,
we must reject the argument of the respondentState
that the
decision of this Court in M/s. Innovatives Systems (supra), and
other decisions following the same, cannot be considered as
binding precedent.
12. In addition, the appellantassessee
has rightly placed
reliance on the decision of this Court in Ranjit Impex (supra). In
that case, the Court considered almost similar stipulation in
Section 51 of the Tamil Nadu VAT Act, 2006. Indeed, the second
proviso therein uses the expression no appeal shall be
“entertained”, unlike the expression used in the provisions under
18
consideration that the appeal so preferred “shall not be
admitted”. We are conscious of the fact that the first proviso
pertaining to maximum period of delay to be condoned by the
Appellate Authority, also uses the expression “admit the appeal”.
That expression “admit”, however, must be read to mean filing,
institution or presentation of the appeal in the office of the
Appellate Authority. Whereas, the expression “admitted” used in
the second proviso will have to be construed as analogous to
expression “entertained”. We are inclined to take this view as the
setting in which the provisions under consideration appear leaves
no manner of doubt that it is ascribable to the event of taking up
the appeal for consideration, for the first time, to admit it on
merits or otherwise and/or for condonation of delay in filing the
appeal, as the case may be. Before that event occurs, it is open to
the appellant to deposit the tax dues in respect of which the
appeal is preferred and produce proof of such deposit before the
Appellate Authority.
13. This view is reinforced from the exposition of this Court in
Ranjit Impex (supra), wherein the view taken by the Division
Bench of the High Court of Madras that the proof of deposit of tax
19
has to be produced at the time when the appeal is taken up for
consideration, but not at the time of filing or presentation of the
appeal, has been upheld.
14. Even the decision of this Court in M/s. Lakshmi Rattan
Engineering Works Ltd. (supra), heavily relied upon by the
respondentState,
does not militate against the view taken by us that
the true purport of the said proviso is that the Appellate
Authority shall proceed with the consideration of appeal for
admission for hearing on merits or otherwise and/or for
condonation of delay in filing appeal, as the case may be, if the
proof of payment of the specified tax dues referred to in the said
proviso is produced by the appellant on the first date of such
consideration of the appeal. Similarly, the case of Narayan
Chandra Ghosh (supra), will be of no avail to the respondent,
wherein the Court opined that there is an absolute bar to
“entertain” an appeal under Section 18 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002, unless the conditions and stipulation are
fulfilled. Inasmuch as, the second proviso under consideration
does not require payment of tax dues referred to therein, at the
20
time of filing, institution or presentation of the appeal but the
proof of such payment has been made, is required to be produced
before the Appellate Authority at the first hearing of the appeal;
failing which the Appellate Authority would be well within its
jurisdiction to reject it rather duty bound not to proceed with the
appeal on merits and to reject the same at the threshold on the
ground of an institutional defect.
15. For the view that we have taken, it is wholly unnecessary to
deal with the other reported decisions relied upon by the parties
or to deal with other arguments which have no bearing on the
conclusion reached by us.
16. Reverting to the factual position in the appeals under
consideration, admittedly, the appellantassessee
had deposited
the specified tax dues before the date on which appeal preferred
by them was taken up for consideration for the first time for
admission on merits. In such a situation, the stated proviso
becomes unavailable to reject the appeal on the ground of
institutional defect. In this view of the matter, all these appeals
must succeed.
21
17. While parting, we may observe that taking advantage of the
interpretation given by us, it is possible that some unscrupulous
litigant (assessee) may file an appeal within the limitation period
but keep it under defect so that the same does not proceed for
consideration before the Appellate Authority. To obviate such a
mischief, we hold and direct that the Appellate Authority shall be
obliged to take up every singular appeal for consideration for
admission on merits and/or for condonation of delay in filing the
appeal for the first time, no later than thirty days from the date of
its filing, institution or presentation in the office of the Appellate
Authority. This direction shall be complied with by all concerned
meticulously, without any exception. That is the only way to
secure the interests of the Revenue and at the same time to
effectuate the purpose underlying the proviso regarding the
deposit of specified amount of tax dues.
18. Resultantly, the impugned judgment of the High Court is set
aside and instead the writ petition(s) are allowed by setting aside
the order passed by the Appellate Authority, rejecting the
concerned appeals on the ground of noncompliance
of the stated
proviso of the provisions under consideration. The concerned
22
appeals shall stand restored to the file of the Appellate Authority.
The same shall proceed for consideration in accordance with law.
All pending applications are also disposed of. No order as to
costs.
Civil Appeal Nos.4098/2016 & 4099/2016
19. These appeals were heard analogously with Civil Appeal
No.7574/2014. In this set of appeals, admittedly, the appellantassessee
deposited the amount after the appeal filed by them
came to be rejected by the Appellate Authority. In that sense, the
appellantassessee
failed to produce proof of payment of tax dues
in respect of which the appeal was preferred before the Appellate
Authority when their appeal was taken up for consideration for
admission. In Civil Appeal No.7574/2014, we have held that it is
open to the assessee to deposit the amount before the event of
first date of hearing of the appeal for admission and/or for
condonation of delay in filing the appeal. Resultantly, the deposit
made after rejection of the appeal will be of no avail to the
appellantassessee,
in light of the mandate of the stated proviso
under consideration.
23
20. In view of the above, these appeals must fail and the same
are therefore, dismissed. All pending applications are also
disposed of. No order as to costs.
Civil Appeal No.8452/2016
21. This appeal was analogously heard along with Civil Appeal
No.7574/2014. In the present appeal, the State has challenged
the judgment and order passed by the High Court in Writ Petition
No.22337 of 2015 and, in particular, the liberty granted to the
respondent (writ petitioner) to pay the requisite amount after
expiry of the limitation period prescribed under Section 33 of AP
VAT Act, 2005 and on such deposit being made, the Appellate
Authority is directed to consider the appeal on merits.
22. The background in which such direction came to be issued,
can be discerned from the appeal filed by the State. To wit, the
respondent, who was dealing in works contracts and was
registered under APGST Act, 1957, was assessed by the
appropriate authority but that assessment was revised by the
Commercial Tax Officer by passing a revision order dated 25th
March, 2013. Against that decision, respondentassessee
24
preferred appeal before the State Sales Tax Appellate Tribunal.
During the pendency of the said appeal, respondent filed a writ
petition to challenge the orders passed by the Commercial Tax
Officer dated 27th February, 2013 and 25th March, 2013. That
writ petition has been disposed of by the High Court vide
impugned judgment, with liberty to comply with the condition of
paying the tax dues in terms of the second proviso of the
concerned provision within a period of six weeks from the date of
receipt of the copy of order and upon such compliance, the
Appellate Authority would decide the pending appeal on merits.
23. Having regard to the exposition in Civil Appeal No.7574 of
2014, decided today, it must follow that if the appeal filed by the
respondent is still pending and has not been taken up for
consideration so far by the Appellate Authority, only then it
would be open to the respondent to deposit the requisite amount
and produce the proof of such deposit before the Appellate
Authority. If, however, the appeal has already been taken up for
consideration for being admitted on merits or otherwise and by
that date the respondent had not deposited the requisite amount
as prescribed in terms of stated proviso, the Appellate Authority
25
would be well within its jurisdiction and rather duty bound to
reject the appeal on the ground of an institutional defect. That is
a matter to be considered by the Appellate Authority. Besides this
observation, nothing more is required to be stated in this appeal
filed by the State.
24. We dispose of the appeal in the aforementioned terms with
no order as to costs. All pending applications are also disposed
of.
Civil Appeal No.5343 of 2019
(Arising out of SLP (C) No.19961/2015)
25. Leave granted.
26. This appeal takes exception to the judgment and order
dated 31st October, 2014 passed by the High Court of Judicature
at Hyderabad for the State of Telangana and the State of Andhra
Pradesh in Writ Petition No.837 of 2014, whereby the writ
petition filed by the assessee challenging the order passed by the
second respondentAppellate
Authority dated 31st December,
2013 came to be rejected. The appeal was dismissed on the sole
ground that the appellant had failed to pay the required twelve
26
and a half percent (12.5%) disputed tax in terms of Section 31 of
AP VAT Act, 2005. Initially, the Commercial Tax Officer passed
an assessment order on 11th June, 2012. The appellant filed
appeal against the said assessment order on 11th July, 2012. The
appellant was called upon by the Appellate Authority vide
communication dated 12th July, 2012 to make good the short
payment of predeposit
in the sum of Rs.1,35,00,512/as
also
the institution fee. The appellant filed response to the said
communication contending that there was input tax credit to the
account of the appellant in the sum of Rs.1080,01,63,420/and
that amount would arise only in respect of the tax paid on
taxable purchases effected within the State. Despite that factual
aspect brought to the notice of the first Appellate Authority, it
rejected the appeal for nonpayment
of predeposit
amount vide
order dated 24th July, 2012. This was an exparte
order.
27. The appellant then filed representation to the assessing
authority for issuing tax credit certificate for giving necessary
adjustments against the taxes payable for 04/2010 to 06/2011
and pointing out the order of the Tribunal dated 18th October,
2011 which was communicated long back but not implemented
thus far. The appellant, therefore, submitted new representation
27
to the assessing authority on 15th September, 2012. The
Commercial Tax Officer eventually, issued a certificate on 12th
October, 2012 certifying that the appellant has input tax credit of
Rs. 92,01,606/,
eligible to be refunded either in cash or
adjusted. On 13th October, 2012, the Commercial Tax Officer
issued proceedings holding that the appellant has an excess tax
credit of Rs.66,46,284/for
adjustment or refund.
28. The appellant being aggrieved by the orders passed by the
Appellate Deputy Commissioner rejecting appeal on 24th July,
2012 on the ground of nonpayment
of requisite disputed tax
amount, filed second appeal before the Sales Tax Appellate
Tribunal. That came to be allowed by setting aside the order
rejecting the first appeal and instead directing the first Appellate
Authority to restore the appeal and hear the appellant, as the
order dated 24th July, 2012 was an ex parte order passed without
hearing the appellant.
29. In remanded proceedings, appellant filed evidence before
the first Appellate Authority on 21st July, 2013 and requested to
consider the evidence and give adjustment of the excess payment
due to the appellant as certified by the assessing authority.
28
Thus, the appellant requested the Appellate Authority to accept
the tax credit certificates and take the appeal on file for disposal
on merits. Despite production of the said certificates, the
Appellate Deputy Commissioner once again called upon the
appellant to pay the balance amount towards predeposit,
vide
communication dated 15th May, 2013. In response thereto, the
appellant filed representation reiterating its earlier stand.
Nevertheless, the Appellate Deputy Commissioner once again
rejected the appeal on 31st December, 2013, for nonpayment
of
predeposit
amount primarily relying upon the judgment of
Ankamma Trading Company (supra). Eventually, the appellant
challenged the aforementioned decision by filing writ petition
No.847 of 2013. That writ petition has been dismissed by the
High Court on the basis of the exposition in Ankamma Trading
Company (supra).
30. The principal grievance of the appellant is that after
remand, the first Appellate Authority failed to consider the
specific stand taken by the appellant that it was entitled to
adjustment of the amount mentioned in the tax credit certificate
and if so done the appellant had complied with the precondition
29
of deposit of twelve and a half percent (12.5%) of the amount in
respect of which the appeal was filed by the appellant before the
first Appellate Authority. Although, this plea was specifically
taken before the Appellate Authority, the judgment of the
Appellate Authority has not analysed the same at all. Instead, it
proceeded to dismiss the appeal merely by relying on the
exposition in Ankamma Trading Company (supra). Similarly,
even the High Court after recording this argument of the learned
counsel for the appellant, has not analysed the same and
mechanically rejected the writ petition on the ground that
appellant had failed to comply with the precondition
of deposit.
This approach of the High Court as well as of the first Appellate
Authority is the subject matter of assail in the present appeal.
31. We have heard the counsel for the parties. As regards the
legal position expounded in Ankamma Trading Company
(supra), we have already answered the same in Civil Appeal
No.7574/2014 decided today. That appeal was heard along with
all connected matters. In the present case, however, the
additional point which arises is whether the appellant was
entitled for adjustment of the amount mentioned in the tax credit
30
certificate issued in favour of the appellant. Admittedly, the
appellant had specifically taken that plea before the first
Appellate Authority. However, as already mentioned hitherto the
first Appellate Authority failed to analyse that aspect which
it
was expected to do, in terms of the earlier order passed by the
second Appellate Authority and even otherwise. Further, this
grievance was specifically made before the High Court in the writ
petition filed by the appellant as is noticed from the impugned
judgment, the relevant portion of the judgment recording the
argument of the appellant, reads thus:
“………
Aggrieved thereby, the present Writ Petition is filed. Sri
Tejprakash Toshniwal, Learned Counsel for the
petitioner, would submit that in M/s. Ideal Detonators
Pvt. Ltd. v. Commercial Tax Officer, the Supreme
Court had directed the Appellate Deputy
Commissioner to revive the earlier order and dispose of
the same on merits, after due notice to the parties; in
Fytochem Formulations Ltd. v. Commercial Tax
Officer, a Division Bench of this Court had held that it
is incumbent on the Commercial Tax Officer to decide
the representation submitted by the petitioner; and, in
case the petitioner is entitled to the excess amount,
then a certificate/endorsement should be issued to
him, so that the amount can be adjusted towards predeposit
of 12.5% at the time of admission of the
appeal; the Commercial Tax Officer was directed to
decide the representation; and, in case the petitioner’s
representation was accepted by the Commercial Tax
Officer, the 2nd respondent was directed to admit the
appeal. Learned Counsel would also rely on Chander
Prakash Goyal v. State of Haryana, in this
regard……………..”
31
32. However, even the High Court has not answered this
specific plea urged by the appellant, in the impugned judgment.
If the appellant is right in contending that the appellant is
entitled for an adjustment of amount and if so done, there would
be no need for the appellant to deposit twelve and a half percent
(12.5%) amount as required by the second proviso of Section 31
of the Act. The appellant had relied on the decisions of this Court
to buttress that argument. However, the same has remained to
be analysed and considered even by the High Court.
33. In that view of the matter, we deem it appropriate to set
aside the impugned judgment and relegate the parties before the
High Court for reconsideration of the Writ Petition No.837/2014
afresh on its own merits in accordance with law and including in
light of decision of this Court in Civil Appeal No.7574/2014
decided today. All contentions available to both sides in the
remanded writ petition are left open to be considered on its own
merits and in accordance with law.
34. Accordingly, this appeal is allowed. The impugned
judgment and order passed by the High Court dated 31st
32
October, 2014 in Writ Petition No.837/2014 is set aside and
instead the writ petition is restored to the file of the High Court
for fresh consideration in light of the observations made hitherto.
All contentions available to the parties are left open. All pending
applications are also disposed of. No order as to costs.
Civil Appeal No.10670/16
35. This appeal was heard analogously with Civil Appeal
No.7574/2014. It has been preferred by the assessee. The
respondent No.2 passed an order dated 24th February, 2015,
levying a penalty under Section 53(3) of the AP VAT Act, 2005
amounting to Rs.67,57,696/,
being equivalent to 100% of the
tax due. The appellant relies on a certificate dated 4th April, 2015
issued by respondent No.1 and stated on oath that a tax credit
carry forward of Rs.10,63,683/by
end of May, 2014 is available
to the appellant. In the appeal preferred by the appellant against
the order imposing additional tax and penalty filed on 7th April,
2015, the appellant specifically took a plea that the input tax
credit and alleged variations between purchase and sales
transactions recorded in the books of account visàvis
the
returns filed under the AP VAT have been wrongly disallowed.
33
Notably, the appellant filed an affidavit stating that a tax credit of
Rs.10,63,683/is
available to the appellant after filing the
monthly return for May, 2014 and that such credit has not been
adjusted to any other tax liability and thus prayed that the said
credit may be adjusted towards the twelve and a half percent
(12.5%) of Rs.67,57,696/,
which comes to Rs.8,44,712/.
Despite this specific stand taken by the appellant on affidavit, the
respondent No.3 issued notice claiming that the appeals filed by
the appellant were not compliant with Section 31 for want of
proof of payment of twelve and a half percent (12.5%) of the
disputed tax and penalty. Later on, respondent No.3 rejected the
appeal on 5th June, 2015 on the ground that the appellant had
failed to produce the proof of payment of twelve and a half
percent (12.5%) of the disputed tax and penalty.
36. It is noticed from the narration of facts in the appeal that
the appellant was then advised to deposit the twelve and a half
percent (12.5%) disputed tax which it did on 30th January, 2016
and 30th March, 2016, in installments. The appellant had also
filed writ petition under Article 226 of the Constitution of India
being Writ Petition No.393 of 2015 and assailed the order passed
by the Appellate Authority, rejecting its appeal on the ground of
34
institutional defect due to nonproduction
of proof of payment of
disputed tax. The High Court relying on Ankamma Trading
Company (supra), rejected the writ petition filed by the appellant.
37. Being aggrieved, the appellant has preferred this appeal.
Upon perusal of order passed by the Appellate Authority, it is
noticed that even the Appellate Authority rejected the appeal
without taking notice of the prayer made by the appellant on oath
that a tax credit of Rs.10,67,683/is
available to the appellant
and that such credit has not been adjusted towards any other tax
liability and can be adjusted towards the twelve and a half
percent (12.5%) of disputed tax amount of Rs.67,57,696/,
which
comes to Rs.4,44,712/only.
The order of the Appellate
Authority, as communicated to the appellant, reads thus:
“The appeal petition along with stay petition (main
appeal & penalty appeal) are returned as the same are
not in accordance in terms of second provision to
sec.31(1) of read with Rule 38 of the AP VAT, 2005 for
the reason.
“Provided further that an appeal so preferred shall not
be admitted by the appellate authority concerned
unless the dealer produces proof of payment of tax
admitted to be due or of such instalments as have
been granted and the proof of payment of 12.5% of the
difference of the tax assessed and the tax admitted by
the appellant, for the relevant tax period, in respect of
which the appeal is preferred.”
35
Further they have not filled the challan for appeal fee
in original and also medical certificate for delay in
submission of the appeal.
Hence, in view of the above, the admission of the two
appeals stand rejected.”
38. Even the High Court has failed to consider this aspect of the
matter. Whereas, if the representation/request made by the
appellant is just and deserved to be accepted, the appellant
would be right in contending that no payment towards the
amount specified in the stated proviso under consideration was
required to be made by the appellant and for that reason, the
appeal preferred by the appellant ought to proceed for
consideration for admission on merits. In that, upon accepting
the representation to adjust the tax credit of Rs.10,63,683/,
a
certificate/endorsement could be issued to the appellant by the
department so that the said amount is adjusted towards payment
of specified amount of tax dues including twelve and a half
percent (12.5%). There is force in this submission. However,
instead of examining this plea raised by the appellant in this
appeal, we deem it proper to relegate the parties before the High
Court to consider the same on its own merits, in accordance with
law. We do not wish to dilate on any other contention in this
36
judgment. We leave all questions and contentions, available to
both sides, open to be decided by the High Court on its own
merits.
39. In view of the above, we set aside the impugned judgment of
the High Court and relegate the parties before the High Court by
restoring the Writ Petition No.31393 of 2015, for fresh
consideration thereof by the High Court on its own merits in
accordance with law. All pending applications are also disposed
of. No order as to costs.
Civil Appeal No.3349/2018
40. This appeal was tagged along with the Civil Appeal
No.7574/2014 and other connected matters. However, in those
cases, the High Court had rejected the writ petition on the sole
ground that the concerned writ petitioner had failed to comply
with the condition of deposit prescribed in terms of stated proviso
of the provision(s) under consideration. In none of these cases,
the High Court considered the matter on merits regarding the
challenge to the original assessment order. In the present appeal,
the appellant cannot be heard to agitate the question already
decided in Civil Appeal No.7574/2014 as nothing has been
brought to our notice to show that the appellant had deposited
the specified tax dues, in respect of which the appeal was filed,
before the first date of consideration of the appeal by the
Appellate Authority.
41. However, as the High Court has dealt with merits of the
challenge to the original order, in exercise of writ jurisdiction and
as no argument was advanced by either party in that regard, we
deem it appropriate to delink this appeal and direct that it be
heard separately on the challenge to the original order passed by
the first Appellate Authority. Appeal to proceed accordingly.
……………………………..J
(A.M. Khanwilkar)
……………………………..J
(Ajay Rastogi)
New Delhi;
July 10, 2019.
Print Page
in M/s. Innovatives Systems (supra), neither refers to any
specific provision nor has it expressly over turned the decision of
the Division Bench of the High Court in Ankamma Trading
Company (supra). Thus, it cannot be considered as a binding
precedent. We are not impressed by this submission. Indeed, the
decision of this Court in M/s. Innovatives Systems (supra), is a
brief judgment. That, however, would make no difference. For, it
is well established that once a special leave petition has been
granted, the doors for the exercise of appellate jurisdiction of this
Court have been let open. Resultantly, the order impugned before
the Supreme Court became an order appealed against and any
order passed thereafter would be an appellate order and attract
the doctrine of merger despite the fact that the order is of reversal
or of modification or of affirming the order appealed against and
including is a speaking or nonspeaking
one. This legal position
has been restated in Kunhayammed (supra). Having said this,
we must reject the argument of the respondentState
that the
decision of this Court in M/s. Innovatives Systems (supra), and
other decisions following the same, cannot be considered as
binding precedent.
(REPORTABLE)
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7574 OF 2014
M/S. S.E. Graphites Private Limited Vs State of Telangana
A.M. Khanwilkar, J.
Dated:July 10, 2019.
1. Leave granted in SLP (C) No.6880 of 2019.
2. These Civil Appeals emanate from the orders passed by the
Appellate Authority rejecting the appeal preferred by the
concerned appellant(s) under the provisions of APGST Act, 1957
2
or AP VAT Act, 2005 or Telangana State VAT Act, 2005, as the
case may be, on the ground that the appellantassessee
had
failed to comply with the precondition
of producing proof of
payment of tax admitted to be due or of such installments as may
have been granted and/or the proof of payment of twelve and a
half percent (12.5%) of the difference of the tax assessed by the
assessing authority and the tax admitted by the appellant for the
relevant assessment year in respect of which the appeal has been
preferred by the concerned appellantassessee,
warranting
rejection of the appeal in terms of the second proviso of Section
19 and proviso of Section 21 (2) of the APGST Act, 1957 or
second proviso of Section 31 and proviso of Section 33 (2) of the
AP VAT Act, 2005. Similar position obtains regarding the
provisions of Telangana State enactments.
3. The High Court dismissed the writ petitions filed by the
concerned appellant following the decision of the coordinate
bench of the High Court in Ankamma Trading Company Vs.
Appellate Deputy Commissioner (CT), Guntur & Anr.1 and
other decisions taking the same view, despite the appellant
1 (2011) 44 VST 189 (AP)
3
pointing out to the High Court that the decision in Ankamma
Trading Company (supra) has been impliedly overruled by the
Supreme Court in M/s. Innovatives Systems, Rep. by its
Managing Partner Vs. State of Andhra Pradesh, Rep. by
Principal Secretary to Government2. In that case, this Court
after clearly noting that the High Court had relied upon the
judgment and order passed by the Division Bench of the same
High Court [in Ankamma Trading Company (supra)] to dismiss
the writ petition preferred by the appellant, yet proceeded to
allow the appeal filed by the appellant therein by setting aside the
decision of the High Court. The appellant in that case had filed
appeal within limitation period but deposited the twelve and a
half percent (12.5%) of the difference of the tax assessed by the
assessing authority in respect of which the appeal was preferred
after the expiry of the limitation period specified in the first
proviso of the concerned provision. This Court, nevertheless, held
that the appellant having deposited the stipulated amount of
twelve and a half percent (12.5%) as directed by the Appellate
Deputy Commissioner (CT), the High Court ought to have
condoned the delay in complying with the direction given by the
2 Civil Appeal No.2230/2015 (arising out of SLP (C) No.1832/2015 decided
on February 23, 2015).
4
Appellate Authority in that regard and thus restored the appeal
with a direction to the Appellate Authority to decide the appeal on
merits. Relying on the subsequent decisions of this Court in M/s.
IOT Infrastructure & Energy Services Ltd., Rep. by its
Deputy Manager (Accounts) Vs. State of Andhra Pradesh
Rep. by its Principal Secretary to Government3 and M/s.
Ranisati Trading Co. Rep. by its Managing Partner Vs.
Commercial Tax Officer, Gajuwaka Circle, Visakhapatnam
and Ors.4, it is urged by the appellantassessee
that the High
Court ought not to have disregarded those decisions on the
specious ground that the same cannot be treated as a binding
precedent and purportedly having been passed in exercise of
plenary powers under Article 142 of the Constitution of India.
Inasmuch as, looking at the decision in M/s. Innovatives
Systems (supra) of this Court, there is hardly any doubt that the
effect of the said order is to impliedly overrule the principle
enunciated by the Division Bench of the High Court in
Ankamma Trading Company (supra) or other decisions
following the same. For, this Court had unmistakably shown
3 (Civil Appeal No.12077/2016 decided on 14.12.2016)
4 (Civil Appeal No.5339/2017 decided on 17.04.2017)
5
inclination to apply its mind to the merits of the said order before
it having granted leave to appeal against the same albeit it had
disposed of the matter by a brief judgment. Thus, additionally,
the doctrine of merger would come into play as exposited in
Kunhayammed and Ors. Vs. State of Kerala and Anr.5,
wherein a threeJudge
Bench of this Court opined that once a
special leave petition has been granted, the doors of the appellate
jurisdiction of this Court have been let open and any order
passed thereafter would be an appellate order and would attract
the applicability of doctrine of merger. Further, it would not make
a difference whether the order is one of reversal or of modification
or of dismissal, or of affirming the order appealed against. It
would also not make any difference if the order is a speaking or a
nonspeaking
one.
4. In addition, the appellant(s)assessee(
s) have relied on the
decisions of this Court in Ranjit Impex Vs. Appellate Deputy
Commissioner and Anr.6, which has had an occasion to deal
with more or less similar provision, if not identically worded,
being Section 51 of the Tamil Nadu VAT Act, 2006. Even there
5 (2000) 6 SCC 359
6 (2013) 10 SCC 655
6
the provision contained stipulation such as the proviso of the
provisions under consideration pertaining to State of Andhra
Pradesh and State of Telangana. It is then urged that even the
Division Bench of the High Court in the case of Ankamma
Trading Company (supra), in paragraph 25 has taken note of
the fact that the proviso of the concerned section does not
specifically mention the time within which such proof of payment
is to be produced but then went on to rely on the first proviso
dealing with the period of limitation within which the appeal is
required to be filed and the maximum period of delay which could
be condoned by the Appellate Authority, to hold that the deposit
specified in the second proviso should also be paid within such
time only. Else, it went on to hold that the Appellate Authority is
obliged to reject the appeal or in other words, not admit the
same.
5. The appellants would urge that there is well recognized
distinction between the factum of filing, institution and
presentation of the appeal and the factum of “entertaining” the
appeal or consideration thereof for admitting the same on merits.
If the provision had expressly stated that the “appeal when filed”
should be “accompanied with” the receipt or proof of payment of
amount referred to in the second proviso, the interpretation
commended to the High Court could be sustained. However, the
High Court itself having recognized the fact that no specific
mention is made about the time within which such proof of
payment is to be produced, the corollary thereof is that the proof
of payment is required to be produced by the assessee on the
“first date of hearing” of the appeal for admission or
consideration thereof on merits. The appellant has also relied on
couple of reported decisions to contend that the right of appeal,
though, it does not inhere in the party, but once such remedy is
provided then it cannot be whittled down by giving strict
interpretation to the second proviso. However, the just approach
would be to read the expression “not to be admitted” as “not to be
entertained” if
the dealer failed to produce proof of payment of
tax dues as per the second proviso of the concerned provision.
The thrust of the argument is that in cases where the appellantassessee
has already paid the requisite amount referred to in the
second proviso of the concerned provision, before the appeal is
taken by the Appellate Authority/Court for the “first time for
consideration” after its filing in the office of the Appellate
8
Authority, that will be substantial compliance of the second
proviso. In such a case, the Appellate Authority would be obliged
to admit the appeal if it deserves consideration on merits and the
appellantassessee
cannot be nonsuited
on the ground that the
amount so paid is after the limitation period specified for filing of
an appeal.
6. The respondentState,
on the other hand, has supported the
exposition in the case of Ankamma Trading Company (supra),
and would urge that the view taken in the said decision is the
only possible interpretation of the second proviso. In that, if the
amount specified in the second proviso is not deposited within
the period provided for filing an appeal and including for
condonation of delay, such appeal would be inflicted with
institutional defect and will have to be rejected on that count in
light of the mandate contained in the proviso of the concerned
provision. It is urged that the appellants have been illadvised
to
invoke doctrine of merger. According to the respondentState,
on
a bare perusal of the decision of this Court in M/s. Innovatives
Systems (supra), and the other decisions passed following the
same would clearly indicate that it has been passed in the fact
9
situation of the concerned case. Notably, this Court has not
interpreted the provisions under consideration or for that matter
explicitly overturned the principle expounded by the Division
Bench in Ankamma Trading Company (supra). Whereas, a bare
reading of the provision makes it amply clear that it is a
mandatory provision. Failure to comply with the stipulation in
the second proviso would inevitably denude the Appellate
Authority from entertaining the same or so to speak, admitting
the same on merits. Heavy reliance has been placed on the
decision in the case of M/s. Lakshmi Rattan Engineering
Works Ltd. Vs. Asst. Commr. Sales Tax, Kanpur & Anr.7,
wherein this Court was called upon to interpret Section 9 of the
relevant enactment. As per that provision, no appeal against an
assessment shall be entertained unless it is accompanied by
satisfactory proof of the payment of the tax amount admitted by
the appellant to be due. The exposition in this decision, according
to the respondentState,
would admit of no other interpretation of
the second proviso as is held by the Division Bench of the High
Court in Ankamma Trading Company (supra). In that, the
Appellate Authority cannot exercise power to admit the appeal
7 (1968) 1 SCR 505
10
beyond the statutory period and since the predeposit
is
quintessence, the requirement of predeposit
within the
maximum period of limitation for filing the appeal including, for
condoning the delay in filing the same, would have bearing on the
second proviso of the concerned provision. Reliance is also placed
on the decision in Narayan Chandra Ghosh Vs. UCO Bank and
Ors.8, which has had an occasion to interpret the purport of
Section 18 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Securities Interest Act, 2002 wherein
the Court noted that there is an absolute power to entertain an
appeal under Section 18 of the Act unless the condition
precedent, as stipulated, is fulfilled. The respondentState
would,
thus, contend that the deposit even if made by the assessee
before the rejection of the appeal (for noncompliance
of the precondition
in terms of the proviso of the concerned provision), will
be of no avail to the assessee.
7. We have heard the learned counsel for the parties. At the
outset, we deem it apposite to reproduce the relevant provisions
of the APGST Act, 1957 and AP VAT Act, 2005. Almost identical
provisions obtain in the Telangana State Acts. Section 19 and 21
8 (2011) 4 SCC 548
11
of the APGST Act, 1957 and Section 31 and 33 of the AP VAT Act,
2005, read thus:
“APGST Act, 1957 A.P. VAT Act, 2005
Section 19. Appeals.(
1) Any dealer
objecting to any order passed or
proceeding recorded by any
authority under the provisions of
the Act other than an order passed
or proceeding recorded by an
Additional Commissioner or Joint
Commissioner, or Deputy
Commissioner under subsection
(4C) of section 14 may within thirty
days from the date on which the
order or proceeding was served on
him, appeal to such authority as
may be prescribed:
Provided that the appellate
authority may within a further
period of thirty days admit the
appeal preferred after a period of
thirty days if he is satisfied that the
dealer had sufficient cause for not
preferring the appeal within that
period:
Provided further that an appeal so
preferred shall not be admitted by
the appellate authority concerned
unless the dealer produces proof of
payment of tax admitted to be due,
or of such instalments as have been
granted, and the proof of payment of
twelve and half per cent of the
difference of the tax assessed by the
assessing authority and the tax
admitted by the appellant, for the
relevant assessment year, in respect
of which the appeal is preferred.
21. Appeal to the Appellate
Tribunal.(
1) Any dealer objecting to
an order passed or proceeding
recorded31.
Appeal to Appellate authority.(
1) Any VAT dealer or TOT dealer or
any other dealer objecting to any
order passed or proceeding recorded
by any authority under the
provisions of the Act other than an
order passed or proceeding recorded
by an Additional Commissioner or
Joint Commissioner or Deputy
Commissioner may, within thirty
days from the date of which the
order or proceeding was serve on
him, appeal to such authority as
may be prescribed:
Provided that the appellate
authority may within a further
period of thirty days admit the
appeal preferred after a period of
thirty days if he is satisfied that the
VAT dealer or TOT dealer or any
other dealer had sufficient cause for
not preferring the appeal within that
period:
Provided further that an appeal so
preferred shall not be admitted by
the appellate authority concerned
unless the dealer produces proof of
payment of tax admitted to be due,
or of such instalments as have been
granted, and the proof of payment of
twelve and half per cent of the
difference of the tax assessed by the
authority prescribed and the tax
admitted by the appellant, for the
relevant tax period, in respect of
which the appeal is preferred.
33. Appeal to the Appellate
Tribunal.(
1) Any dealer objecting to
an order passed or proceeding
recorded12
(a) by any prescribed authority on
appeal under section 19, or
(b) by an Additional Commissioner
or Joint Commissioner or Deputy
Commissioner suo motu under
subsection
(4C) of section 14 or
under subsection
(2) of section
20, may appeal to the Appellate
Tribunal within sixty days from
the date on which the order or
proceeding was served on him.
(2) The Appellate Tribunal may
within a further period of sixty days
admit the appeal after the period of
sixty days specified in subsection
(1), if it is satisfied that the dealer
had sufficient cause for not
preferring the appeal with that
period.
Provided that no appeal against the
order passed under section 19 shall
be admitted under subsection
(1)
or subsection
(2), unless it is
accompanied by satisfactory proof of
the payment of fifty per cent of the
tax as ordered by the Appellate
Deputy Commissioner under
section19:
Provided further that no appeal
against the order passed under subsection
(2) of section 20 shall be
admitted under subsection
(1) or
subsection
(2), unless it is
accompanied by satisfactory proof of
the payment of the tax admitted by
the appellant to be due or in such
instalments thereof as might have
become payable as the case may be,
and twenty five per cent of the
difference of the tax ordered by the
revisional authority under subsection
(2) of section 20 and the tax
admitted by the appellant:
(a) by any authority prescribed, on
appeal under section 31, or
(b) by the Additional Commissioner,
or Joint Commissioner or
Deputy Commissioner under
section 21 or 32 or 38; or
(c) by any authority following the
ruling or order passed under
section 67;
May appeal to the Appellate
Tribunal within sixty days from the
date on which the order or
proceeding was served on him.
(2) The Appellate Tribunal may
within a further period of sixty days
admit the appeal preferred after the
period of sixty days specified in subsection
(1), if it is satisfied that the
dealer had sufficient cause for not
preferring the appeal within that
period:
Provided that no appeal against the
order passed under section 31 shall
be admitted under subsection
(1)
or subsection
(2) of this section
unless it is accompanied by
satisfactory proof of the payment of
fifty per cent of the tax, penalty,
interest or any other amount as
ordered by the appellate authority
under section 31.”
13
Provided also that the assessing
authority shall refund the said
amount of twelve and half per cent
or twenty five per cent or fifty per
cent of the difference of tax assessed
by the assessing authority or
revisional authority as the case may
be and the tax admitted and paid by
the appellant, with simple interest
calculated at the rate of 18 per cent
per annum if the refund is not made
within 60 days from the date of
receipt of the order passed under
section 19 or section 21.
(emphasis supplied)
8. These provisions have been interpreted by the Division
Bench of the High Court in the case of Ankamma Trading
Company (supra). We are essentially concerned with the second
proviso of Section 19 and Section 31 of the respective enactment;
and first proviso of Section 21(2) and Section 33(2) of the
respective enactment. Upon reading the Section under
consideration as a whole, it is evident that the first proviso in the
concerned Section (Section 19 and Section 31, as the case may
be) pertains to limitation period “for filing” of an appeal; and
discretion of the Appellate Authority to condone the delay in filing
of such appeal, up to a maximum period specified therein.
Indeed, the second proviso is part of the same Section. However,
it is an independent condition and in one sense, mutually
exclusive condition mandating or enjoining the appellant to
14
produce proof of payment of tax dues in respect of which the
appeal is preferred. That obligation, in our opinion, can be
discharged until the appeal is considered for admission and/or
condonation of delay in filing of the appeal, as the case may be,
by the Appellate Authority for the first time. We are inclined to
take this view as even the High Court in Ankamma Trading
Company (supra) had justly noted that the said proviso does not
provide for any specific period within which the tax dues should
be paid. Moreover, there is no express stipulation to deposit the
tax dues in respect of which the appeal is preferred, at the time of
its filing, institution or presentation as such. In the absence of
such a clear stipulation, it must necessarily follow that it is open
to the assessee to file the appeal within the statutory period of
limitation provided therefor and later on, deposit the specified tax
dues but before the appeal is taken up for consideration by the
Appellate Authority for the first time – be it for condonation of
delay in filing the appeal and/or to admit it on merits or
otherwise. The proof of such payment having been made could be
produced thereat. Failing which, the Appellate Authority will have
no other option but to reject the appeal on that count. The
15
Appellate Authority has no power to extend the time to deposit
the specified tax dues.
9. Suffice it to observe that, stricto sensu, the said proviso is
not a provision of predeposit
at the stage of filing, institution or
presentation of the appeal as such; but is a provision stipulating
payment of tax dues as a prerequisite
or sine qua non for
consideration of appeal on merits or otherwise and/or for
condonation of delay in filing the same, as the case may be, for
the first time. If we may say so, it is also to impose fetter on the
Appellate Authority from admitting the appeal for consideration
on merits. It is well recognized that filing, institution or
presentation of appeal in the office of the Appellate Authority is
an independent event than the appeal being taken up for
consideration “for the first time” for being admitted on merits or
otherwise and/or for condonation of delay in filing it, as the case
may be. There is no reason to interpret the stated proviso in any
other manner lest, inevitably, it would result in rewriting
the
same and entail in doing violence to the legislative intent.
Presumably, this Court in M/s. Innovatives Systems (supra),
and other decisions rendered following the same, therefore, was
16
persuaded to allow the appeal preferred by the assessee and to
relegate the parties before the Appellate Authority for
consideration of the appeal for admission on merits.
10. Concededly, this Court was conscious of the decision in
Ankamma Trading Company (supra). In that, the judgment
under challenge before it in the concerned appeal was founded on
the view already taken by the coordinate bench of the same High
Court [including in Ankamma Trading Company (supra)]. It
has been so recorded by this Court. In that sense, the legal
position expounded in Ankamma Trading Company (supra),
stood impliedly overruled, even though that decision has not
been adverted to or expressly overruled by this Court.
11. The argument of the respondent proceeds that the decision
in M/s. Innovatives Systems (supra), neither refers to any
specific provision nor has it expressly over turned the decision of
the Division Bench of the High Court in Ankamma Trading
Company (supra). Thus, it cannot be considered as a binding
precedent. We are not impressed by this submission. Indeed, the
decision of this Court in M/s. Innovatives Systems (supra), is a
brief judgment. That, however, would make no difference. For, it
is well established that once a special leave petition has been
granted, the doors for the exercise of appellate jurisdiction of this
Court have been let open. Resultantly, the order impugned before
the Supreme Court became an order appealed against and any
order passed thereafter would be an appellate order and attract
the doctrine of merger despite the fact that the order is of reversal
or of modification or of affirming the order appealed against and
including is a speaking or nonspeaking
one. This legal position
has been restated in Kunhayammed (supra). Having said this,
we must reject the argument of the respondentState
that the
decision of this Court in M/s. Innovatives Systems (supra), and
other decisions following the same, cannot be considered as
binding precedent.
12. In addition, the appellantassessee
has rightly placed
reliance on the decision of this Court in Ranjit Impex (supra). In
that case, the Court considered almost similar stipulation in
Section 51 of the Tamil Nadu VAT Act, 2006. Indeed, the second
proviso therein uses the expression no appeal shall be
“entertained”, unlike the expression used in the provisions under
18
consideration that the appeal so preferred “shall not be
admitted”. We are conscious of the fact that the first proviso
pertaining to maximum period of delay to be condoned by the
Appellate Authority, also uses the expression “admit the appeal”.
That expression “admit”, however, must be read to mean filing,
institution or presentation of the appeal in the office of the
Appellate Authority. Whereas, the expression “admitted” used in
the second proviso will have to be construed as analogous to
expression “entertained”. We are inclined to take this view as the
setting in which the provisions under consideration appear leaves
no manner of doubt that it is ascribable to the event of taking up
the appeal for consideration, for the first time, to admit it on
merits or otherwise and/or for condonation of delay in filing the
appeal, as the case may be. Before that event occurs, it is open to
the appellant to deposit the tax dues in respect of which the
appeal is preferred and produce proof of such deposit before the
Appellate Authority.
13. This view is reinforced from the exposition of this Court in
Ranjit Impex (supra), wherein the view taken by the Division
Bench of the High Court of Madras that the proof of deposit of tax
19
has to be produced at the time when the appeal is taken up for
consideration, but not at the time of filing or presentation of the
appeal, has been upheld.
14. Even the decision of this Court in M/s. Lakshmi Rattan
Engineering Works Ltd. (supra), heavily relied upon by the
respondentState,
does not militate against the view taken by us that
the true purport of the said proviso is that the Appellate
Authority shall proceed with the consideration of appeal for
admission for hearing on merits or otherwise and/or for
condonation of delay in filing appeal, as the case may be, if the
proof of payment of the specified tax dues referred to in the said
proviso is produced by the appellant on the first date of such
consideration of the appeal. Similarly, the case of Narayan
Chandra Ghosh (supra), will be of no avail to the respondent,
wherein the Court opined that there is an absolute bar to
“entertain” an appeal under Section 18 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002, unless the conditions and stipulation are
fulfilled. Inasmuch as, the second proviso under consideration
does not require payment of tax dues referred to therein, at the
20
time of filing, institution or presentation of the appeal but the
proof of such payment has been made, is required to be produced
before the Appellate Authority at the first hearing of the appeal;
failing which the Appellate Authority would be well within its
jurisdiction to reject it rather duty bound not to proceed with the
appeal on merits and to reject the same at the threshold on the
ground of an institutional defect.
15. For the view that we have taken, it is wholly unnecessary to
deal with the other reported decisions relied upon by the parties
or to deal with other arguments which have no bearing on the
conclusion reached by us.
16. Reverting to the factual position in the appeals under
consideration, admittedly, the appellantassessee
had deposited
the specified tax dues before the date on which appeal preferred
by them was taken up for consideration for the first time for
admission on merits. In such a situation, the stated proviso
becomes unavailable to reject the appeal on the ground of
institutional defect. In this view of the matter, all these appeals
must succeed.
21
17. While parting, we may observe that taking advantage of the
interpretation given by us, it is possible that some unscrupulous
litigant (assessee) may file an appeal within the limitation period
but keep it under defect so that the same does not proceed for
consideration before the Appellate Authority. To obviate such a
mischief, we hold and direct that the Appellate Authority shall be
obliged to take up every singular appeal for consideration for
admission on merits and/or for condonation of delay in filing the
appeal for the first time, no later than thirty days from the date of
its filing, institution or presentation in the office of the Appellate
Authority. This direction shall be complied with by all concerned
meticulously, without any exception. That is the only way to
secure the interests of the Revenue and at the same time to
effectuate the purpose underlying the proviso regarding the
deposit of specified amount of tax dues.
18. Resultantly, the impugned judgment of the High Court is set
aside and instead the writ petition(s) are allowed by setting aside
the order passed by the Appellate Authority, rejecting the
concerned appeals on the ground of noncompliance
of the stated
proviso of the provisions under consideration. The concerned
22
appeals shall stand restored to the file of the Appellate Authority.
The same shall proceed for consideration in accordance with law.
All pending applications are also disposed of. No order as to
costs.
Civil Appeal Nos.4098/2016 & 4099/2016
19. These appeals were heard analogously with Civil Appeal
No.7574/2014. In this set of appeals, admittedly, the appellantassessee
deposited the amount after the appeal filed by them
came to be rejected by the Appellate Authority. In that sense, the
appellantassessee
failed to produce proof of payment of tax dues
in respect of which the appeal was preferred before the Appellate
Authority when their appeal was taken up for consideration for
admission. In Civil Appeal No.7574/2014, we have held that it is
open to the assessee to deposit the amount before the event of
first date of hearing of the appeal for admission and/or for
condonation of delay in filing the appeal. Resultantly, the deposit
made after rejection of the appeal will be of no avail to the
appellantassessee,
in light of the mandate of the stated proviso
under consideration.
23
20. In view of the above, these appeals must fail and the same
are therefore, dismissed. All pending applications are also
disposed of. No order as to costs.
Civil Appeal No.8452/2016
21. This appeal was analogously heard along with Civil Appeal
No.7574/2014. In the present appeal, the State has challenged
the judgment and order passed by the High Court in Writ Petition
No.22337 of 2015 and, in particular, the liberty granted to the
respondent (writ petitioner) to pay the requisite amount after
expiry of the limitation period prescribed under Section 33 of AP
VAT Act, 2005 and on such deposit being made, the Appellate
Authority is directed to consider the appeal on merits.
22. The background in which such direction came to be issued,
can be discerned from the appeal filed by the State. To wit, the
respondent, who was dealing in works contracts and was
registered under APGST Act, 1957, was assessed by the
appropriate authority but that assessment was revised by the
Commercial Tax Officer by passing a revision order dated 25th
March, 2013. Against that decision, respondentassessee
24
preferred appeal before the State Sales Tax Appellate Tribunal.
During the pendency of the said appeal, respondent filed a writ
petition to challenge the orders passed by the Commercial Tax
Officer dated 27th February, 2013 and 25th March, 2013. That
writ petition has been disposed of by the High Court vide
impugned judgment, with liberty to comply with the condition of
paying the tax dues in terms of the second proviso of the
concerned provision within a period of six weeks from the date of
receipt of the copy of order and upon such compliance, the
Appellate Authority would decide the pending appeal on merits.
23. Having regard to the exposition in Civil Appeal No.7574 of
2014, decided today, it must follow that if the appeal filed by the
respondent is still pending and has not been taken up for
consideration so far by the Appellate Authority, only then it
would be open to the respondent to deposit the requisite amount
and produce the proof of such deposit before the Appellate
Authority. If, however, the appeal has already been taken up for
consideration for being admitted on merits or otherwise and by
that date the respondent had not deposited the requisite amount
as prescribed in terms of stated proviso, the Appellate Authority
25
would be well within its jurisdiction and rather duty bound to
reject the appeal on the ground of an institutional defect. That is
a matter to be considered by the Appellate Authority. Besides this
observation, nothing more is required to be stated in this appeal
filed by the State.
24. We dispose of the appeal in the aforementioned terms with
no order as to costs. All pending applications are also disposed
of.
Civil Appeal No.5343 of 2019
(Arising out of SLP (C) No.19961/2015)
25. Leave granted.
26. This appeal takes exception to the judgment and order
dated 31st October, 2014 passed by the High Court of Judicature
at Hyderabad for the State of Telangana and the State of Andhra
Pradesh in Writ Petition No.837 of 2014, whereby the writ
petition filed by the assessee challenging the order passed by the
second respondentAppellate
Authority dated 31st December,
2013 came to be rejected. The appeal was dismissed on the sole
ground that the appellant had failed to pay the required twelve
26
and a half percent (12.5%) disputed tax in terms of Section 31 of
AP VAT Act, 2005. Initially, the Commercial Tax Officer passed
an assessment order on 11th June, 2012. The appellant filed
appeal against the said assessment order on 11th July, 2012. The
appellant was called upon by the Appellate Authority vide
communication dated 12th July, 2012 to make good the short
payment of predeposit
in the sum of Rs.1,35,00,512/as
also
the institution fee. The appellant filed response to the said
communication contending that there was input tax credit to the
account of the appellant in the sum of Rs.1080,01,63,420/and
that amount would arise only in respect of the tax paid on
taxable purchases effected within the State. Despite that factual
aspect brought to the notice of the first Appellate Authority, it
rejected the appeal for nonpayment
of predeposit
amount vide
order dated 24th July, 2012. This was an exparte
order.
27. The appellant then filed representation to the assessing
authority for issuing tax credit certificate for giving necessary
adjustments against the taxes payable for 04/2010 to 06/2011
and pointing out the order of the Tribunal dated 18th October,
2011 which was communicated long back but not implemented
thus far. The appellant, therefore, submitted new representation
27
to the assessing authority on 15th September, 2012. The
Commercial Tax Officer eventually, issued a certificate on 12th
October, 2012 certifying that the appellant has input tax credit of
Rs. 92,01,606/,
eligible to be refunded either in cash or
adjusted. On 13th October, 2012, the Commercial Tax Officer
issued proceedings holding that the appellant has an excess tax
credit of Rs.66,46,284/for
adjustment or refund.
28. The appellant being aggrieved by the orders passed by the
Appellate Deputy Commissioner rejecting appeal on 24th July,
2012 on the ground of nonpayment
of requisite disputed tax
amount, filed second appeal before the Sales Tax Appellate
Tribunal. That came to be allowed by setting aside the order
rejecting the first appeal and instead directing the first Appellate
Authority to restore the appeal and hear the appellant, as the
order dated 24th July, 2012 was an ex parte order passed without
hearing the appellant.
29. In remanded proceedings, appellant filed evidence before
the first Appellate Authority on 21st July, 2013 and requested to
consider the evidence and give adjustment of the excess payment
due to the appellant as certified by the assessing authority.
28
Thus, the appellant requested the Appellate Authority to accept
the tax credit certificates and take the appeal on file for disposal
on merits. Despite production of the said certificates, the
Appellate Deputy Commissioner once again called upon the
appellant to pay the balance amount towards predeposit,
vide
communication dated 15th May, 2013. In response thereto, the
appellant filed representation reiterating its earlier stand.
Nevertheless, the Appellate Deputy Commissioner once again
rejected the appeal on 31st December, 2013, for nonpayment
of
predeposit
amount primarily relying upon the judgment of
Ankamma Trading Company (supra). Eventually, the appellant
challenged the aforementioned decision by filing writ petition
No.847 of 2013. That writ petition has been dismissed by the
High Court on the basis of the exposition in Ankamma Trading
Company (supra).
30. The principal grievance of the appellant is that after
remand, the first Appellate Authority failed to consider the
specific stand taken by the appellant that it was entitled to
adjustment of the amount mentioned in the tax credit certificate
and if so done the appellant had complied with the precondition
29
of deposit of twelve and a half percent (12.5%) of the amount in
respect of which the appeal was filed by the appellant before the
first Appellate Authority. Although, this plea was specifically
taken before the Appellate Authority, the judgment of the
Appellate Authority has not analysed the same at all. Instead, it
proceeded to dismiss the appeal merely by relying on the
exposition in Ankamma Trading Company (supra). Similarly,
even the High Court after recording this argument of the learned
counsel for the appellant, has not analysed the same and
mechanically rejected the writ petition on the ground that
appellant had failed to comply with the precondition
of deposit.
This approach of the High Court as well as of the first Appellate
Authority is the subject matter of assail in the present appeal.
31. We have heard the counsel for the parties. As regards the
legal position expounded in Ankamma Trading Company
(supra), we have already answered the same in Civil Appeal
No.7574/2014 decided today. That appeal was heard along with
all connected matters. In the present case, however, the
additional point which arises is whether the appellant was
entitled for adjustment of the amount mentioned in the tax credit
30
certificate issued in favour of the appellant. Admittedly, the
appellant had specifically taken that plea before the first
Appellate Authority. However, as already mentioned hitherto the
first Appellate Authority failed to analyse that aspect which
it
was expected to do, in terms of the earlier order passed by the
second Appellate Authority and even otherwise. Further, this
grievance was specifically made before the High Court in the writ
petition filed by the appellant as is noticed from the impugned
judgment, the relevant portion of the judgment recording the
argument of the appellant, reads thus:
“………
Aggrieved thereby, the present Writ Petition is filed. Sri
Tejprakash Toshniwal, Learned Counsel for the
petitioner, would submit that in M/s. Ideal Detonators
Pvt. Ltd. v. Commercial Tax Officer, the Supreme
Court had directed the Appellate Deputy
Commissioner to revive the earlier order and dispose of
the same on merits, after due notice to the parties; in
Fytochem Formulations Ltd. v. Commercial Tax
Officer, a Division Bench of this Court had held that it
is incumbent on the Commercial Tax Officer to decide
the representation submitted by the petitioner; and, in
case the petitioner is entitled to the excess amount,
then a certificate/endorsement should be issued to
him, so that the amount can be adjusted towards predeposit
of 12.5% at the time of admission of the
appeal; the Commercial Tax Officer was directed to
decide the representation; and, in case the petitioner’s
representation was accepted by the Commercial Tax
Officer, the 2nd respondent was directed to admit the
appeal. Learned Counsel would also rely on Chander
Prakash Goyal v. State of Haryana, in this
regard……………..”
31
32. However, even the High Court has not answered this
specific plea urged by the appellant, in the impugned judgment.
If the appellant is right in contending that the appellant is
entitled for an adjustment of amount and if so done, there would
be no need for the appellant to deposit twelve and a half percent
(12.5%) amount as required by the second proviso of Section 31
of the Act. The appellant had relied on the decisions of this Court
to buttress that argument. However, the same has remained to
be analysed and considered even by the High Court.
33. In that view of the matter, we deem it appropriate to set
aside the impugned judgment and relegate the parties before the
High Court for reconsideration of the Writ Petition No.837/2014
afresh on its own merits in accordance with law and including in
light of decision of this Court in Civil Appeal No.7574/2014
decided today. All contentions available to both sides in the
remanded writ petition are left open to be considered on its own
merits and in accordance with law.
34. Accordingly, this appeal is allowed. The impugned
judgment and order passed by the High Court dated 31st
32
October, 2014 in Writ Petition No.837/2014 is set aside and
instead the writ petition is restored to the file of the High Court
for fresh consideration in light of the observations made hitherto.
All contentions available to the parties are left open. All pending
applications are also disposed of. No order as to costs.
Civil Appeal No.10670/16
35. This appeal was heard analogously with Civil Appeal
No.7574/2014. It has been preferred by the assessee. The
respondent No.2 passed an order dated 24th February, 2015,
levying a penalty under Section 53(3) of the AP VAT Act, 2005
amounting to Rs.67,57,696/,
being equivalent to 100% of the
tax due. The appellant relies on a certificate dated 4th April, 2015
issued by respondent No.1 and stated on oath that a tax credit
carry forward of Rs.10,63,683/by
end of May, 2014 is available
to the appellant. In the appeal preferred by the appellant against
the order imposing additional tax and penalty filed on 7th April,
2015, the appellant specifically took a plea that the input tax
credit and alleged variations between purchase and sales
transactions recorded in the books of account visàvis
the
returns filed under the AP VAT have been wrongly disallowed.
33
Notably, the appellant filed an affidavit stating that a tax credit of
Rs.10,63,683/is
available to the appellant after filing the
monthly return for May, 2014 and that such credit has not been
adjusted to any other tax liability and thus prayed that the said
credit may be adjusted towards the twelve and a half percent
(12.5%) of Rs.67,57,696/,
which comes to Rs.8,44,712/.
Despite this specific stand taken by the appellant on affidavit, the
respondent No.3 issued notice claiming that the appeals filed by
the appellant were not compliant with Section 31 for want of
proof of payment of twelve and a half percent (12.5%) of the
disputed tax and penalty. Later on, respondent No.3 rejected the
appeal on 5th June, 2015 on the ground that the appellant had
failed to produce the proof of payment of twelve and a half
percent (12.5%) of the disputed tax and penalty.
36. It is noticed from the narration of facts in the appeal that
the appellant was then advised to deposit the twelve and a half
percent (12.5%) disputed tax which it did on 30th January, 2016
and 30th March, 2016, in installments. The appellant had also
filed writ petition under Article 226 of the Constitution of India
being Writ Petition No.393 of 2015 and assailed the order passed
by the Appellate Authority, rejecting its appeal on the ground of
34
institutional defect due to nonproduction
of proof of payment of
disputed tax. The High Court relying on Ankamma Trading
Company (supra), rejected the writ petition filed by the appellant.
37. Being aggrieved, the appellant has preferred this appeal.
Upon perusal of order passed by the Appellate Authority, it is
noticed that even the Appellate Authority rejected the appeal
without taking notice of the prayer made by the appellant on oath
that a tax credit of Rs.10,67,683/is
available to the appellant
and that such credit has not been adjusted towards any other tax
liability and can be adjusted towards the twelve and a half
percent (12.5%) of disputed tax amount of Rs.67,57,696/,
which
comes to Rs.4,44,712/only.
The order of the Appellate
Authority, as communicated to the appellant, reads thus:
“The appeal petition along with stay petition (main
appeal & penalty appeal) are returned as the same are
not in accordance in terms of second provision to
sec.31(1) of read with Rule 38 of the AP VAT, 2005 for
the reason.
“Provided further that an appeal so preferred shall not
be admitted by the appellate authority concerned
unless the dealer produces proof of payment of tax
admitted to be due or of such instalments as have
been granted and the proof of payment of 12.5% of the
difference of the tax assessed and the tax admitted by
the appellant, for the relevant tax period, in respect of
which the appeal is preferred.”
35
Further they have not filled the challan for appeal fee
in original and also medical certificate for delay in
submission of the appeal.
Hence, in view of the above, the admission of the two
appeals stand rejected.”
38. Even the High Court has failed to consider this aspect of the
matter. Whereas, if the representation/request made by the
appellant is just and deserved to be accepted, the appellant
would be right in contending that no payment towards the
amount specified in the stated proviso under consideration was
required to be made by the appellant and for that reason, the
appeal preferred by the appellant ought to proceed for
consideration for admission on merits. In that, upon accepting
the representation to adjust the tax credit of Rs.10,63,683/,
a
certificate/endorsement could be issued to the appellant by the
department so that the said amount is adjusted towards payment
of specified amount of tax dues including twelve and a half
percent (12.5%). There is force in this submission. However,
instead of examining this plea raised by the appellant in this
appeal, we deem it proper to relegate the parties before the High
Court to consider the same on its own merits, in accordance with
law. We do not wish to dilate on any other contention in this
36
judgment. We leave all questions and contentions, available to
both sides, open to be decided by the High Court on its own
merits.
39. In view of the above, we set aside the impugned judgment of
the High Court and relegate the parties before the High Court by
restoring the Writ Petition No.31393 of 2015, for fresh
consideration thereof by the High Court on its own merits in
accordance with law. All pending applications are also disposed
of. No order as to costs.
Civil Appeal No.3349/2018
40. This appeal was tagged along with the Civil Appeal
No.7574/2014 and other connected matters. However, in those
cases, the High Court had rejected the writ petition on the sole
ground that the concerned writ petitioner had failed to comply
with the condition of deposit prescribed in terms of stated proviso
of the provision(s) under consideration. In none of these cases,
the High Court considered the matter on merits regarding the
challenge to the original assessment order. In the present appeal,
the appellant cannot be heard to agitate the question already
decided in Civil Appeal No.7574/2014 as nothing has been
brought to our notice to show that the appellant had deposited
the specified tax dues, in respect of which the appeal was filed,
before the first date of consideration of the appeal by the
Appellate Authority.
41. However, as the High Court has dealt with merits of the
challenge to the original order, in exercise of writ jurisdiction and
as no argument was advanced by either party in that regard, we
deem it appropriate to delink this appeal and direct that it be
heard separately on the challenge to the original order passed by
the first Appellate Authority. Appeal to proceed accordingly.
……………………………..J
(A.M. Khanwilkar)
……………………………..J
(Ajay Rastogi)
New Delhi;
July 10, 2019.
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