M/S. Calcom Electronics Ltd vs The Commissioner Of Sales Tax /Vat ...
2014 Latest Caselaw 6865 Del

$~6 to 10

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

                                       Date of decision: December 16, 2014

+       ST.APPL. 48/2014 & CM No. 13821/2014
        M/S. CALCOM ELECTRONICS LTD                     ..... Appellant
                        Through: Mr.Balram Sangal, Advocate
                        versus
        THE COMMISSIONER OF SALES TAX /VAT DELHI
                                                           ..... Respondent

Through: Mr.Sushil Dutt Salwan, ASC with Ms.Latika Dutta, Advocate + ST.APPL. 51/2014 & CM No. 14002/2014 M/S. CALCOM ELECTRONICS LTD ..... Appellant Through: Mr.Balram Sangal, Advocate versus THE COMMISSIONER OF SALES TAX / VAT DELHI ..... Respondent Through: Mr.Sushil Dutt Salwan, ASC with Ms.Latika Dutta, Advocate + ST.APPL. 52/2014 & CM No. 14048/2014 M/S. CALCOM ELECTRONICS LTD ..... Appellant Through: Mr.Balram Sangal, Advocate versus THE COMMISSIONER OF SALES TAX / VAT DELHI ..... Respondent Through: Mr.Sushil Dutt Salwan, ASC with Ms.Latika Dutta, Advocate

+ ST.APPL. 59/2014 & CM Nos. 16290-92/2014 M/S. CALCOM VISION LIMITED ..... Appellant Through: Mr.Balram Sangal, Advocate versus THE COMMISSIONER OF SALES TAX / VAT DELHI ..... Respondent Through: Mr.Sushil Dutt Salwan, ASC with

Ms.Latika Dutta, Advocate

+ ST.APPL. 60/2014 & CM Nos. 16293-95/2014 M/S. CALCOM VISION LIMITED ..... Appellant Through: Mr.Balram Sangal, Advocate versus THE COMMISSIONER OF SALES TAX /VAT DELHI ..... Respondent Through: Mr.Sushil Dutt Salwan, ASC with Ms.Latika Dutta, Advocate CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE V. KAMESWAR RAO

SANJIV KHANNA, J (ORAL)

CM Nos. 16290/2014 & 16292/2014 (condonation of delay) in ST. APPL. 59/2014 CM Nos. 16293/2014 & 16295/2014 (condonation of delay) in ST. APPL. 60/2014

These are the applications for condonation of delay in filing and

refiling the appeals. There is a delay of 47 days in filing and a delay of 15

days in refiling of the appeals. We condone the delay in filing and refiling

noticing the fact that the appellant has earlier filed applications for review

before the Appellate Tribunal, constituted under the Delhi Value Added Tax

Act, 2004. Upon dismissal of the review applications, the present appeals

were preferred. Counsel for the respondent revenue has waived his right to

file reply. The applications are accordingly allowed.

ST.APPL. Nos. 48, 51, 52, 59 & 60 of 2014

1. Looking at the similarity of issue and questions raised in these

appeals, we are disposing the same with the consent of the counsel for the

parties, by this common order.

2. The following substantial question of law is framed in the appeals

preferred by the appellant Calcom Electronics Ltd.:

"Whether Appellate Tribunal, Value Added Tax was

justified and correct in directing the appellant assessee to

deposit 10% of the disputed amount as pre-deposit and

therefore a pre-condition for hearing of the appellant on

merits?

3. In the appeals filed by Calcom Vision Ltd., the following substantial

question of law is framed:

"Whether Appellate Tribunal, Value Added Tax was

justified and correct in directing the appellant assessee to

deposit 20% of the disputed amount payable under Delhi

Sales Tax Act and Central Sales Tax Act and 10% of the

disputed penalty as a pre-condition for hearing of the

appeals on merits?

4. Counsel for the parties have stated that as a short issue arises

for consideration, arguments may be heard and the appeals be

decided.

ST APPL. Nos. 48, 51 & 52 of 2014 (filed by Calcom Electronics Ltd.) (

filed by Calcom Electronics Ltd.)

5. The appeals pertain to the Financial Years 1997-98, 1998-99 and

1999-00.

Financial Year : 1997-98

6.1 For the Financial Year 1997-98, by the Assessment Order dated

30.08.2000, the tax demand of Rs.1,24,39,318/- and Rs. 2,11,19,411/- was

created under the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act,

1956. In the first appeal, the Additional Commissioner, vide order dated

05.09.2001, directed the appellant herein to deposit Rs.45 lacs and Rs. 5 lacs

under the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956

respectively, as a condition precedent for hearing appeal on merits.

6.2 Aggrieved, the appellant filed the appeals before the Sales Tax

Appellate Tribunal, which were decided by order dated 16.10.2001,

directing the appellant herein to make pre-deposit of Rs. 4 lacs under the

Delhi Sales Tax Act, 1975 and Rs. 2000/- under the Central Sales Tax Act,

1956. The said deposits were duly made.

6.3 The first appellate authority, after a gap of 11 years vide order dated

7.9.2012, rejected the first appeal on merits. Thereupon, the appellant

assessee preferred an appeal before the Appellate Tribunal and by the

impugned order dated 28.03.2014, has been directed to deposit 10% of the

disputed amount as a condition precedent for hearing appeals on merits.

Financial Year :- 1998-99

7 By the Assessment Order dated 27.02.2001 relating to the Financial

Year 1998-99, demand of Rs. 18,29,303/- and Rs. 28,42,429/- was created

under the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956,

respectively. The First appellate authority vide order dated 5.9.2001 directed

the appellant to deposit Rs.10 lacs and Rs. 50,000 under Delhi Sales Tax Act

1975 and Central Sales Tax Act, 1956, respectively, as a condition precedent

for hearing appeals on merits. Aggrieved, the appellant preferred an appeal

before the Sales Tax Appellate Tribunal, where the amount of pre-deposit

was reduced to Rs.3000/- and Rs. 4000/- under the Delhi Sales Tax Act,

1975 and the Central Sales Tax Act, 1956, respectively. Again, after a gap

of 11 years, the first appellate authority rejected the appeal vide order dated

07.09.2012. The appellant thereupon, preferred an appeal before the

Appellate Tribunal, Value Added Tax and by order dated 28.03.2014, has

been directed to deposit 10% of the disputed amount as a pre-condition for

hearing of the appeals on merits.

Financial Year: - 1999-00

8 In respect of the Financial Year 1999-00, by Assessment Order dated

31.12.2001, demand of Rs. 3,11,075/- and Rs. 7,17,961/- was created under

the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956,

respectively. Subsequently, a reassessment order was passed on 30.09.2002,

creating additional demand of Rs. 6,93,616/- and Rs.31,29,853/- under the

Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956,

respectively. The appellant assessee preferred appeals and vide order dated

13.3.2003, the First Appellate Authority directed the appellant to make a

pre-deposit of Rs.24,000/- under the Delhi Sales Tax Act, 1975 and Rs. 3

lacs under the Central Sales Tax, 1956. The aforesaid pre-deposits were in

relation to both the assessment and reassessment orders. Aggrieved, the

appellant preferred an appeal before the Sales Tax Appellate Tribunal

whereby the pre-deposit was reduced to Rs. 10,000/- under the Delhi Sales

Tax Act, 1975 and Rs. 40,000/- under the Central Sales Tax Act, 1956. The

appellant was however asked to furnish a surety of Rs.2.5 lacs and Rs. 3 lacs

under the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956,

respectively. The said deposits were made and surety were furnished. After

about 10 years, vide order dated 7.9.2012, the first appellate authority

dismissed the appeal on merits. Aggrieved, the appellant assessee has filed

appeals before the Appellate Tribunal, Value Added Tax and has been asked

to deposit 10% of the disputed amount.

ST. APPL. No. 59 of 2014 (filed by Calcom Vision Ltd.) (Financial Year 1997-98)

9. As per the Assessment Order dated 08.09.2000, additional demand of

Rs. 53,48,221/- was created under the Delhi Sales Tax Act, 1975 and

Rs.2,03,233/- under the Central Sales Tax Act, 1956. The first appellate

authority, by order dated 22.8.2001, directed the appellant to pay 20% of the

disputed tax amount under the Delhi Sales Tax, 1975 and 10% of the

disputed tax amount under the Central Sales Tax Act, 1956. Aggrieved, the

appellant assessee filed appeal before the Sales Tax Appellate Tribunal and

the amount of pre-deposit was reduced to Rs.2 lacs. The deposit was duly

made. After about 11 years, by order dated 21.09.2012, the first appellate

authority dismissed the appeal on merits. Aggrieved, the appellant assessee

has filed an appeal before the Appellate Tribunal, Value Added Tax and has

been asked to deposit 20% of the disputed tax amount under the Delhi Sales

Tax Act, 1975 and the Central Sales Tax Act, 1956 and 10% of the disputed

penalty amount as a pre-condition for hearing of the appeals on merits.

ST. APPL. No. 60 of 2014 (filed by Calcom Vision Ltd.) (Financial Year 1998-99)

10. By Assessment Order dated 09.01.2001, demand of Rs.17,41,950/-

and Rs.1,82,002/- was created under the Delhi Sales Tax Act, 1975 and the

Central Sales Tax Act, 1956 respectively. The first appellate authority, vide

order dated 22.8.2001, directed the appellant herein to deposit 10% of the

disputed amount under both the Delhi Sales Tax Act, 1975 and the Central

Sales Tax Act, 1956. The said deposit was duly made. By order dated

21.09.2012, an order of remand was passed in respect of Form 'C', but, rest

of the demand under the Delhi Sales Tax Act, 1975 and the Central Sales

Tax Act, 1956 was sustained. Aggrieved, the appellant assessee preferred

an appeal before the Appellate Tribunal, Value Added Tax and by impugned

order dated 06.03.2014, has been directed to make pre-deposit of 20% of the

disputed amount of tax under the Delhi Sales Tax Act, 1975 and the Central

Sales Tax Act, 1956 and 10% of the disputed penalty amount.

Findings

11. What is highlighted and pointed out before us is that the disputed

amounts pertain to the Financial Years 1997-98 to 1999-2000. It has been

further highlighted that the proceedings have remained pending for over a

decade and the appellant assessee cannot be blamed and was not responsible

for the same. It is further highlighted that the appellant is not in a position to

pay the said amounts because of the change in circumstances and their weak

financial position/condition. Before us, the appellants have filed various

charts to illustrate that the demand primarily is on account of the sales tax

statutory forms. It is stated that the photocopies of the said forms were duly

filed before the authorities on different dates, but, have not been verified and

considered by them. It is highlighted that the Appellate Tribunal has

incorrectly observed that the forms were filed for the first time before

Tribunal and have to be verified and checked. Our attention is drawn to

various orders in which it is recorded that the appellant assessee had

produced Forms 'C', ST-49 and ST-35 Forms. Before us also the assessee

has produced the said forms in original. It is stated that the record

maintenance by the respondent revenue is not satisfactory and of required

standard. The forms often get misplaced or become untraceable. Even

proper receipt is not given. Even photocopies of forms stated to have been

filed by the appellant, are not traceable.

12. We have gone through the contentions raised by the parties and have

also examined various appellate orders in which reference to the forms etc.

has been made. The orders do indicate that forms were certainly filed either

before the Assessing Officer or the first appellate authority or before the

Appellate Tribunal on or before 2001, though some forms were filed for the

first time before the Appellate Tribunal in 2014. Primarily, the demand

created is on account of the said forms. It is noticeable that in the cases filed

by Calcom Electronics Ltd., the appellant relies upon ST-35 forms of Rs.

6,21,91,904/- from their sister concern Calcom Vision Ltd., the other

appellant. It is also noticeable that the question of pre-deposit had earlier

become the subject matter of an order passed by the Tribunal in the case of

Calcom Electronics Ltd. for the Financial Years 1997-98, 1998-99 and in the

case of Calcom Vision Ltd. for the Financial Year 1997-98. The said

deposits as directed were made. The financial position of the appellant

company, it is apparent, rather weak and any harsh condition would put

them in difficulty as the appeals would not be heard and decided on merits

but dismissed on the ground of non-payment of pre-deposit.

13. It has been rightly highlighted before us that the Appellate Tribunal,

Value Added Tax has primarily proceeded and erred in holding that the

forms had been filed for the first time before it in 2014, whereas the case of

the appellants is that most of the forms were filed earlier but have not been

verified. The value of the forms now filed in 2014 is only miniscule.

14. Keeping in view the aforesaid position, we modify the directions

given by the Appellate Tribunal, Value Added Tax in respect of the pre-

deposit as under:

(i) Calcom Electronics Ltd. will deposit a consolidated amount of Rs. 10

lacs, which will be deposited in two instalments. The first instalment of Rs.5

lakh will be deposited within a period of one month from today and the

second instalment of Rs. 5 lacs will be paid within a period of two months

after the payment of first instalment.

(ii) Calcom Vision Ltd. will make pre-deposit of Rs.5 lacs within two

months from today.

The said deposits will be made before the Appellate Tribunal, Value

Added Tax and will abide by the orders passed by the said Tribunal. The

deposits will be kept in an interest bearing FDR.

(iii) Calcom Vision Ltd. will file an undertaking before the Appellate

Tribunal, Value Added Tax, stating that they shall not sell, alienate or

encumber the immovable property located at Greater Noida, U.P. and in

case the appellants i.e. Calcom Electronics Ltd. or Calcom Vision Ltd. are

not able to pay the sales tax dues as per the final determination, the sales tax

authorities can proceed against the said property for recovery of dues of the

appellants i.e. Calcom Vision Ltd. as well as dues payable by Calcom

Electronics Ltd. The said undertaking will be filed within a period of one

month from today before the Appellate Tribunal, Value Added Tax.

(iv) Another set of photocopies of all the forms available with the

appellants will be submitted to the respondent revenue within a period of

one month and revenue will be entitled to ask for and examine the originals.

The said request will be made in writing, specifying the date and time when

the original should be produced. The appellants will fully co-operate in the

said enquiry.

15. We, accordingly, answer the substantial question of law in terms of

our directions given above. The appeals are partly allowed and disposed of.

SANJIV KHANNA, J

V. KAMESWAR RAO, J

DECEMBER 16, 2014/akb