Swastik Overseas Corporation vs State Of Gujarat
2021 Latest Caselaw 66 Guj

          C/SCA/14314/2020                                           ORDER



            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

       R/SPECIAL CIVIL APPLICATION NO.14314 of 2020
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               SWASTIK OVERSEAS CORPORATION
                           Versus
                     STATE OF GUJARAT
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Appearance:
MR PRAGNESH M GANDHI(5328) for the Petitioner(s) No. 1,2
 for the Respondent(s) No. 1,2,3
MR TRUPESH KATHIRIYA, AGP for the respondents
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 CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA
        and
        HONOURABLE MR. JUSTICE ILESH J. VORA

                        Date : 05/01/2021
                            ORAL ORDER

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1. By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following reliefs:

"(a) Your Lordships may be pleased to issue a writ of certiorari and/or mandamus or a writ in the nature of certiorari or mandamus and/or any other appropriate writ, order or direction quashing and setting aside the impugned order dated 02.03.2020 received on 20.08.2020 in so far as the requirement of payment of pre­deposit and the matter may be remanded back to the First Appellate Authority so as to decide the matter on merits without the condition of pre­deposit.

(b)Pending admission and final hearing of the present petition, by way of interim order, this Hon'ble Court may be pleased to stay the implementation, operation and execution of the impugned order dated 02.03.2020 issued by Ld. GVAT Tribunal;

(c) An ex­parte ad­interim relief in terms of para (b) may be passed in the interest of justice."

2. We have heard Mr. Pragnesh Gandhi, the learned

C/SCA/14314/2020 ORDER

counsel appearing for the writ applicants and Mr.Trupesh Kathiriya, the learned AGP appearing for the State - Respondent.

3. It appears from the materials on record that the assessment order in Form 304 under Section 32/34/35 of the Gujarat Value Added Tax Act, 2003 (for short "the Act, 2003") came to be passed by the Assessing Officer dated 10.01.2019. The Assessing Officer determined the liability as under:

   Details            Payable Tax       Amount Paid        Balance Due
                      Amount (Rs.)      (Rs.)              (Rs.)
   Assessed           2042837           0                  2042837
   Tax
   Interest           1409557           0                  1409557
   Penalty            3064256           0                  3064256
   Total              6516650           0                  6516650

4. Being dissatisfied with the order of assessment, the writ applicants preferred an appeal before the First Appellate Authority. The First Appeal came to be summarily dismissed on the ground of non­payment of 20 % of the total dues towards pre­deposit as provided under Section 74 of the Act, 2003.

5. Being dissatisfied with the dismissal of the First Appeal, the writ applicants went before the Tribunal by way of the Second Appeal No.528 of 2019. The Tribunal passed the following order on 03.09.2019 :

"(2) Learned Advocate, Mr. Udyan N. Mody, appeared and submitted that appellant is a trader in all types of oils, oil seeds and agro products. He submitted that Assessing Authority

C/SCA/14314/2020 ORDER

has erroneously assumed that appellant has not sold goods lying in stock and claimed ITC of such unsold stock. He submitted that First Appellate Authority summarily dismissed first appeal on ground of non­payment of 20 % of total dues towards pre­deposit without considering merits of the case. He relied upon the judgment of Hon. Supreme Court in the case of Pennar Industries Ltd. Vs. State of A.P. And others (2009) 2 SCC 177 and Ravi Gupta Vs. CST 22 VST 529 SC. He submitted that appellant is eligible to ITC of the goods lying in stock purchased from registered dealers and not liable to tax, interest and penalty, therefore, present second appeal may be admitted and stay against recovery proceedings may be granted without direction of pre­deposit.

(3) Learned Government Representative, Ms. R.S.Pandya placed her reliance upon the first appeal order and assessment order. She submitted that order passed by the First Appellate Authority upon the assessment order is just, proper and legal, therefore, substantial amount towards pre­deposit may be directed before admitting second appeal and granting stay against recovery proceedings.

(4) Considering the rival submissions, facts and circumstances of the case, it appears from the face of first appeal order that appellant has failed to submit the documentary evidences. It also appears that first appeal is summarily dismissed on the ground of non­payment of 20 % of total dues towards pre­deposit. Considering overall facts and reasons, second appeal is admitted on condition of appellant depositing 20 % of tax towards pre­deposit within one month. On payment of aforementioned amount, stay against recovery proceedings shall come into operation till final disposal of appeal. For compliance of order and production of challan, matter is adjourned to 15th October, 2019."

6. It appears that, later the Tribunal passed the following order on 02.03.2020 :

"(1) In the present matter learned Advocate Mr. U.N.Mody for the appellant appeared and submitted an application dated 19/12/2019 stating that appellant is not in position to comply with the direction of this Tribunal dated 03/09/2019 towards

C/SCA/14314/2020 ORDER

pre­deposit. He submitted that while passing the order submission may be taken into consideration.

(2)Learned Government Representative Ms. R.S.Pandya strongly objected to the submissions. She submitted that appellant was directed to pay 20 % tax amount towards pre­deposit vide order dated 03/09/2019. She submitted that submissions made by the appellant dated 19/12/2019 is an afterthought. After scrutiny of the paper book of the present Second Appeal, this Hon'ble Tribunal has passed very specific direction to pay 20 % tax amount towards pre­deposit, therefore, it cannot be so construed that submission made by appellant today is not taken into consideration while passing direction towards pre­deposit.

She submitted that since appellant has categorically expressed inability to comply with the direction of this Tribunal towards pre­deposit, therefore, matter may be dismissed.

(3) Considering the rival submission and facts of the case, it appears that while passing direction of pre­deposit the reasons of the auction process carried on by NSE was stated by the appellant at page no.5 of the paper book. Therefore, at this juncture reasons assigned by the Advocate Mr. Mody could not sustain on premises of facts and law for non­payment of pre­deposit. This Tribunal has passed the direction of 20 % tax amount on 03/09/2019 after considering the aforementioned facts.

Since the appellant has failed to comply with the direction of pre­deposit, therefore, at no option and alternate this Tribunal decides to dismiss the present Second Appeal.

(4) In light of the aforementioned facts and reasons, following order is passed :

O R D E R

The present Second Appeal No.528 of 2019 is hereby dismiss for the reasons of non­compliance with direction of pre­deposit. Any relief granted earlier is hereby vacated with immediate effect. Accordingly the present Second Appeal stands dismissed with no order as to cost.

7. Being dissatisfied with the order passed by the Tribunal referred to above, the writ applicants are

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here before this Court with the present writ application.

8. In our opinion, no error not to speak of any error of law could be said to have been committed by the Tribunal in passing the impugned order. No case is made out to interfere on any of the grounds raised in this writ application. With a view to give one chance to the writ applicants, we inquired with Mr. Gandhi, the learned counsel appearing for the writ applicants, whether his clients would be in a position to furnish some tangible security in lieu of deposit of 20 % of the total tax dues. However, Mr. Gandhi submitted that his clients are not in a position to offer any tangible security of any nature.

9. In view of the above, this writ application fails and is hereby dismissed.

(J. B. PARDIWALA, J)

(ILESH J. VORA,J) SUCHIT