Grace Industries vs State of Gujarat

M.R. Shah, J.—In the facts and circumstances of the case and considering the fact that common appellant is as such asking for installments, to make the payment of pre-deposit as ordered by the Tribunal to deposit an amount of Rs. 22,96,969 as pre-condition to decide the appeal on merits on remand by the appellate authority, pursuant to the common judgment and order passed by the learned Gujarat Value Added Tax Tribunal passed in Second Appeal Nos. 327 to 330 of 2010, we have heard the present appeals for final disposal today with the consent of the learned advocates for the respective parties. Shri Jaymin Gandhi, learned Assistant Government Pleader accepts the copy of the present appeals and waives service of notice of rule on behalf of the respondent.

That the common appellant is carrying out the business of reselling as well as manufacturing of edible oil. That the Sales Tax Officer assessed the appellant for the years 2002-03 and 2003-04. That the Sales Tax Officer issued the notice in form No. 36 for assessment and passed the order dated March 31, 2008 and total demand was raised of Rs. 5,15,54,784 (inclusive of tax liability interest and the penalty). It is to be noted that under the aforesaid assessment order, the tax liability was of Rs. 2,29,69,686.

Being aggrieved and dissatisfied with the order of assessment, the appellant preferred appeal before the appellate authority, i.e., Deputy Commissioner of Commercial Taxes, Division-2 at Ahmedabad. That in the said appeals, order of pre-deposit was passed by the appellate authority, however as the appellant did not deposit the amount of pre-deposit, the appeals came to be rejected summarily on the ground of non-payment of pre-deposit.

Feeling aggrieved and dissatisfied with the order passed by the appellate authority rejecting the appeals summarily on the ground of non-payment of pre-deposit, the appellant herein preferred Second Appeal Nos. 327 to 330 of 2010 before the Gujarat Value Added Tax Tribunal, Ahmedabad and by common judgment and order dated September 9, 2010, the learned Tribunal partly allowed the aforesaid appeals and quashed and set aside the order passed by the Deputy Commissioner (appellate authority) dated March 26, 2010 and directed the appellate authority to hear and decide the appeals on merits in accordance with law, however on condition that the appellant to make the payment of Rs. 22,96,969, (i.e., 10 per cent of the tax amount, i.e., Rs. 2,29,69,686). That thereafter, respective appellants preferred Restoration Application Nos. 12 to 15 of 2012 in the aforesaid Second Appeal Nos. 327 to 330 of 2010 seeking restoration of aforesaid appeals. That the said application came to be rejected by the Tribunal by common order dated January 10, 2012. It appears that common appellant, did not comply with the order of deposit/payment of Rs. 22,96,969 as ordered by the Tribunal while passing the order dated September 9, 2010 and after a period of approximately three years, the appellant submitted the Miscellaneous Application Nos. 5 to 8 of 2013 requesting the Tribunal to grant 48 monthly installments for making the payment of Rs. 22,96,969. By impugned order dated March 11, 2013, learned Tribunal has dismissed the aforesaid application mainly on the ground that thereafter after more than three years, the request of the installment has made, which cannot be considered.

Feeling aggrieved and dissatisfied with the impugned order dated March 11, 2013 passed in Miscellaneous Application Nos. 5 to 8 of 2013, the common appellant has preferred the present appeals.

Shri Tanvish Bhatt, learned advocate for the appellant, has made only one submission and has requested to grant reasonable installments to the appellant to make the payment of Rs. 22,96,969 so that their appeals on the merits can be considered by the appellate authority. It is submitted that considering the fact that the order of deposit of Rs. 22,96,969 was passed by the learned Tribunal in the year 2010, the appellant may be saddled with the liability to pay the interest on the aforesaid amount of Rs. 22,96,969 from the date of passing of the order by the learned Tribunal. It is submitted that the aforesaid liability of interest at the rate of 10 per cent from the date of passing of the order passed by the learned Tribunal be considered while granting installments. It is submitted by Shri Bhatt, learned advocate for the appellant that the appellant shall file an undertaking of partner of the appellant to make the payment of Rs. 22,96,969 with interest at the rate of 10 per cent from the date of passing of the order passed by the Tribunal within the stipulated time which may be granted by this court. He has also stated at the bar under the instructions from the partner of the appellant that despite the fact that the appeal was remanded to the appellate authority on payment of Rs. 22,96,969 as far as back on September 9, 2010, no further recovery proceedings have been initiated till date pursuant to the order of assessment.

Shri Gandhi, learned Assistant Government Pleader while opposing the present appeals has vehemently submitted that as such the appellant was required to make the payment of Rs. 22,96,969 as far as back in the month of September 2010 which was pre-condition of considering the appeal of the appellant on merits by the appellate authority, the appellant did not deposit/make the payment of aforesaid amount and in fact submitted miscellaneous application for installments in making the payment of aforesaid amount of Rs. 22,96,969 only in 2013 and therefore, the Tribunal has rightly rejected the said applications. It is submitted that if the appellant would have made payment of Rs. 22,96,969 as earlier ordered by the Tribunal, in that case, even the appeal on remand would have been heard by the appellate authority on merits in the meantime. Therefore, it is requested to dismiss the present appeals. In the alternative, it is submitted that in case this court is inclined to grant some more installments to the appellant, the appellant shall be saddled with the liability to pay the interest at the rate of 10 per cent per annum on the aforesaid amount of Rs. 22,96,969 from the date of passing of the order passed by the Tribunal, i.e., September 9, 2010 and the payment of the said interest shall be irrespective of outcome of the appeals on remand and only for the purpose of granting installments only.

Having heard the learned advocates for the respective parties and considering the fact that the appellant was required to make the payment of Rs. 22,96,969 pursuant to the judgment and order passed by the Gujarat Value Added Tax Tribunal dated September 9, 2010 passed in Second Appeal Nos. 327 to 330 of 2010, by which the learned Tribunal remanded the matter to the appellate authority and directed to decide and appeals on merits on condition that the appellant shall make the payment of Rs. 22,96,969. As stated above, the appeal preferred by the appellant came to be dismissed by the appellate authority-Deputy Commissioner of Commercial Taxes, Division-2, Ahmedabad, on non-payment of pre-deposit. It is true that as such the appellant ought to have approached the learned Tribunal for installments at the earliest and ought not to have waited till 2013. However, considering the fact that the question is only with respect to the pre-deposit and the appellant shall be given an opportunity to submit the case on merits, in the facts and circumstances of the case, we are of the opinion that on payment of interest at the rate of 10 per cent per annum from September 9, 2010 till actual payment is made, the appellant may be given further six months time to make the payment of Rs. 22,96,969 and on that appeal shall be decided by the appellate authority on merits. It is required to be noted at this stage that as stated by Shri Tanvish Bhatt, learned advocate for the appellant that after the order dated September 9, 2010 and despite the fact that appellant did not make the payment of Rs. 22,96,969 as ordered by the Tribunal in its order dated September 9, 2010, no further recovery proceedings have been initiated pursuant to the order of assessment which was challenged before the appellate authority. Under the circumstances, if the appellant is granted time up to December 31, 2013 to make the payment of aforesaid amount of Rs. 22,96,969 by granting six months equally monthly installments with 10 per cent interest on the aforesaid amount from September 9, 2010 till December 31, 2013, it will meet the ends of justice. In view of the above and for the reasons stated above, the present appeals succeed in part and the impugned order passed by the learned Gujarat Value Added Tax Tribunal dated March 11, 2013 passed in Miscellaneous Application Nos. 5 to 8 of 2013 is modified and common appellant is granted further time to make the payment of Rs. 22,96,969 on or before December 31, 2013 and to be paid in six equal monthly installments on further condition that the appellant shall also make the payment of aforesaid Rs. 22,96,969 with 10 per cent interest per annum from September 9, 2010 till December 31, 2013 and the aforesaid amount of interest shall be paid in last installment. It is observed that the aforesaid payment of interest shall be irrespective of outcome of the decision of the appellate authority on remand and the same is while granting further six month installments, meaning thereby irrespective of outcome of the appeal on remand, the same shall be retained by the Department. On deposit of aforesaid amount of Rs. 22,96,969 with 10 per cent interest thereon from September 9, 2010 till December 31, 2013 within stipulated time as stated above, the appeals preferred by the appellant shall be decided and disposed of by the appellate authority on merits as ordered by the Tribunal while passing the order dated September 9, 2010 passed in Second Appeal Nos. 327 to 330 of 2010 at the earliest. The managing partner of the appellant shall file undertaking before this court with a copy to the concerned Sales Tax Officer that they shall make the payment of Rs. 22,96,969 with 10 per cent interest thereon from September 9, 2010 to December 31, 2013 within the stipulated time as stated above and in the meantime they shall not alienate, transfer in manner whatsoever the property of the appellant-partnership firm, within a period of two weeks from today. It is observed that if the appellant fails to make the payment of aforesaid amount of Rs. 22,96,969 with 10 per cent interest thereon from September 9, 2010 till December 31, 2013 as stated above within stipulated time, it will be open for the Sales Tax Officer/appropriate authority to recover the amount under the order of assessment which shall be without prejudice to any further proceedings for breach of undertaking. With this, all these appeals are disposed of.