THE HON'BLE SRI JUSTICE T. VINOD KUMAR
AND
THE HON'BLE SRI JUSTICE PULLA KARTHIK
WRIT PETITION No.36789 OF 2015
ORDER: (per Hon'ble Sri Justice T.Vinod Kumar)
This Writ Petition is filed for issue of writ of mandamus
with the following prayers:
i. setting aside the order of the 1st respondent dated
01.10.2013 as passed in violation of principles of natural justice overlooking the objections of the petitioner dated 28.05.2013; and ii. in the alternative set-aside the order of the 2nd respondent dated 01.08.2015 for the tax period 2011-12 under the APVAT Act, 2005 and permit the petitioner to make payment of balance pre-deposit of 12.5% of the disputed tax of Rs.68,43,263/- within a period of six weeks and consequently direct the 2nd respondent to restore the appeal on file for adjudication on merits.
2. Heard Sri B. Narasimha Sarma, learned Counsel representing Sri G. Kalyan Chakravarthy, learned Counsel for the petitioner and Sri K. Raji Reddy, learned Special Standing Counsel appearing for the respondents, and perused the record.
3. Petitioner contends that it is a registered dealer under the provisions of A.P. VAT Act, 2005 (for short 'the Act') on the rolls 2 of Commercial Tax office, Jubilee hills circle and is undertaking execution of works contracts.
4. Petitioner contends that for the tax period from April, 2011 to March, 2012, the petitioner was issued with show cause notice dated 12.04.2013 proposing to assess the petitioner to tax under the provisions of Act; that to the said show cause notice, the petitioner had submitted its reply dated 03.05.2013; that upon submission of the afore-stated reply, the 1st respondent authority issued a revised show cause notice dated 06.05.2013 proposing to assess the petitioner to tax under Section 4(7)(a) of the Act and Rule 17(1)(e) of the VAT Rules; and that to the said revised show cause notice, the petitioner had filed its reply dated 28.05.2013.
5. Petitioner further contends that upon it filing detailed reply dated 28.05.2013 enclosing therewith the relevant documents, the 1st respondent authority had passed order dated 01.10.2013, served on 05.10.2013, raising a demand of under- declared output tax in a sum of Rs.6,37,05,021/- and directed the said under-declared output tax be paid within a period of thirty days.
6. Petitioner further contends that aggrieved by the said order of assessment, it had approached the 1st appellate 3 authority by filing appeal under Section 31 of the Act on 06.11.2013 and that the said appeal was rejected by the 2nd respondent authority by its order dated 01.08.2015 holding that the petitioner did not make the mandatory pre-deposit of 12.5% of the disputed tax as prescribed under the second proviso to Section 31(1) of the Act; and that the High Court of Andhra Pradesh in Ankamma Trading Co. v. Commissioner1 held that the admission of the appeals filed before the Appellate Deputy Commissioner are liable for rejection if payment of admitted tax/12.5% of the disputed tax is made beyond the prescribed period of sixty days from the date of receipt of the impugned order (i.e., assessment order).
7. Aggrieved by the said order of the 2nd respondent in rejecting the appeal on the ground of non-payment of pre- deposit amount as specified in Section 31 of the Act, the petitioner has filed the present Writ Petition assailing, firstly the correctness of the assessment order dated 01.10.2013, and alternatively it also sought for setting aside the order of the 2nd respondent authority in rejecting the appeal filed on the ground of non-payment of the pre-deposit amount and permit the 1 (2011) 44 VST 189 (AP) = 2011 SCC OnLine AP 1205 4 petitioner to make the payment for maintaining the appeal before the 2nd respondent authority.
8. Learned Counsel for the petitioner would contend that the reliance placed by the 2nd respondent authority while rejecting the appeal filed, on the basis of the judgment of this Court in Ankamma Trading Co. (1 supra) stands impliedly overruled by the judgment of the Hon'ble Supreme Court in S.E. Graphites Private Limited v. State of Telangana2 and therefore the petitioner may be afforded with an opportunity to make the payment for maintaining the appeal before the 2nd respondent as otherwise the petitioner would be left remediless.
9. Learned counsel for petitioner further contends that the Supreme Court, in a similar matter where the mandatory payment of pre-deposit was made after the appeal was dismissed by the Appellate Authority, had observed that the High Court ought to have condoned the delay in making such payment of pre-deposit, and allowed the Civil Appeal in the case of Innovative Systems v. State of A.P.3.
10. Learned counsel also contends that this Court in similar situation in WP No.22337 of 2015 wherein the Appellate 2 (2020) 14 SCC 521 3 (2020) 14 SCC 542 5 Authority rejected the appeal at the admission stage for not complying with the condition of pre-deposit permitted the petitioner therein to make the pre-deposit within a period of six weeks, and if this Court so permits, the petitioner in the present Writ Petition would make the pre-deposit for maintaining the appeal filed by it before the 2nd respondent authority in the event of this Court not being inclined to go into the merits to consider the correctness of the order of assessment passed by the 1st respondent authority.
11. Per contra, Sri K. Raji Reddy, learned Special Standing Counsel appearing on behalf of the respondents vehemently opposes the submissions made by the learned Counsel for the petitioner.
12. Learned Special Standing Counsel by drawing attention of this Court to the judgment of the Supreme Court in S.E. Graphites Private Limited (3 supra) would submit that the issue under consideration before the Hon'ble Supreme Court was as to whether the appellate authority could have taken note of the payment of pre-deposit made subsequent to the filing of the appeal, including the period of condonation of delay as provided under the Act. It is further contended that the Supreme Court while dealing with the said plea had observed 6 that the pre-deposit made after filing of appeal, but before the first date of hearing is to be permitted, while in the facts of the present case though the petitioner had filed appeal on 06.11.2013 and the first hearing having been granted by the 2nd respondent authority on 20.07.2015, the petitioner did not make payment of the pre-deposit amount and, as such, the decision of the Supreme Court in S.E. Graphites Private Limited (3 supra), cannot be taken advantage of.
13. Learned Special Standing Counsel would further contend that the petitioner not only failed to make any payment upto the date of first hearing, but is also continuing the default as of today and, as such, no indulgence can be shown by this Court either by granting time for making payment of pre-deposit amount for taking the appeal on record or deciding the same on merit.
14. We have taken note of the contentions urged.
15. It is to be seen that aggrieved by the order of assessment passed by the 1st respondent dated 01.10.2013, the petitioner had filed appeal in time i.e., within thirty days as prescribed under the Act. Though the petitioner had filed appeal in time, it is an admitted fact that it did not make payment of pre-deposit of 12.5% of the disputed tax, except the payment of the appeal 7 fee of Rs.1,000/-. Upon rejection of the appeal by the 2nd respondent authority, the petitioner choose to challenge the said order by questioning the assessment order also before this Court and thus there was no situation where the petitioner could have made the payment of pre-deposit amount prescribed under the Act.
16. This Court, on 17.11.2015, taking note of the fact that the SLP preferred against the decision of this Court in Ankamma Trading Company (1 supra) is pending consideration before the Supreme Court, admitted the present Writ Petition and that is how the present Writ Petition is pending on the file of this Court, since 2015.
17. Further, it is to be seen that the Hon'ble Supreme Court in Innovative Systems (2 supra) while taking note of the fact that petitioner therein had made payment of pre-deposit of 12.5% of the disputed tax even after the appeal was dismissed by the Appellate Authority had allowed the Civil Appeal, setting aside the judgment of the combined High Court for the State of Telangana and the State of Andhra Pradesh, while restoring the appeal to the file of the Appellate Deputy Commissioner to decide the same on merits observed that:
8
"8. It is an admitted fact that after the disposal of the appeal by the Appellate Deputy Commissioner, the appellant had deposited the pre-deposit as directed by the Appellate Deputy Commissioner (CT), Vishakhapatnam.
9. In a scenario like this, we are of the opinion that the High Court ought to have condoned the delay in complying with the order passed by the Appellate Deputy Commissioner (CT), Vishakhapatnam and should have directed him to decide the appeal on merits. Since that has not been done by the High Court, we take exception to the said order."
18. Though the delay in the case of Innovative Systems (2 supra) was of three months from the date of rejection of appeal to the date of payment, it is the principle and ratio laid down that need to be applied and not by comparing the period of delay. In the facts of the present case, since the petitioner had approached this Court upon rejection of the appeal by the 2nd respondent and this Court having admitted the Writ Petition, this Court is of the considered opinion that the petitioner cannot be deprived of the benefit of the ratio decidendi of the judgment of the Supreme Court in Innovative Systems (2 supra) on the ground of lapse of long period. Further, if the period during which the present Writ Petition is pending before this Court is excluded, the period from the date of 9 dismissal/rejection of appeal would not be too long a period as contended by the Special Standing Counsel.
19. Since the Writ Petition is filed challenging the order of assessment which involves factual aspects as also in the alternative, the rejection of the appeal by the 2nd respondent on the ground of non-payment of the pre-deposit relying on the judgment of Ankamma Trading Co. (1 supra) which now stands impliedly overruled, we are of the considered view that instead of this Court delving into the factual aspect involved in the matter, should direct the petitioner to make the payment of the pre-deposit amount within a reasonable time as specified herein, as has been done by the co-ordinate bench of this Court in WP No.22337 of 2015, and upon such payment directing the 2nd respondent authority to decide the appeal on its merits.
20. Considering the fact that, since seven years have passed by from the date of rejection of the appeal by the 2nd respondent and the admission of the Writ Petition by this Court, the reasonable time for making pre-deposit would be two weeks from today.
21. Having regard to the peculiar facts as stated hereinabove, this Court is of the view that it would be reasonable to direct the petitioner to make the pre-deposit of 12.5% disputed tax in two 10 weeks from today i.e., on or before 22.12.2022. Upon the petitioner making the said payment of pre-deposit within the time specified hereinabove and filing proof of such payment with the 2nd respondent authority, the order of the 2nd respondent dated 01.08.2015 by which the appeal filed by the petitioner has been rejected stands set aside and the appeal is restored to the file of the 2nd respondent authority, who thereafter shall decide the matter on merits in accordance with law after granting opportunity of personal hearing to the petitioner.
22. Subject to the above direction, the Writ Petition is disposed of. No costs.
23. Consequently, miscellaneous petitions pending, if any, shall stand closed.
_____________________ T. VINOD KUMAR, J ____________________ PULLA KARTHIK, J Date: 08.12.2022 MRKR 11 THE HON'BLE SRI JUSTICE T. VINOD KUMAR AND THE HON'BLE SRI JUSTICE PULLA KARTHIK WRIT PETITION No.36789 OF 2015 08.12.2022 MRKR