Vinod Kumar Dugar, Proprietor Of ... vs State Of Gujarat
2023 Latest Caselaw 717 Guj

    C/SCA/21012/2019                           JUDGMENT DATED: 30/01/2023




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 21012 of 2019

                                  With
              R/SPECIAL CIVIL APPLICATION NO. 21013 of 2019
                                  With
              R/SPECIAL CIVIL APPLICATION NO. 21014 of 2019
                                  With
              R/SPECIAL CIVIL APPLICATION NO. 21015 of 2019

FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE SONIA GOKANI

and
HONOURABLE MR. JUSTICE SANDEEP N. BHATT

==========================================================

1    Whether Reporters of Local Papers may be allowed               NO
     to see the judgment ?

2    To be referred to the Reporter or not ?                        NO

3    Whether their Lordships wish to see the fair copy              NO
     of the judgment ?

4    Whether this case involves a substantial question              NO
     of law as to the interpretation of the Constitution
     of India or any order made thereunder ?

==========================================================
    VINOD KUMAR DUGAR, PROPRIETOR OF ARIHANT ENTERPRISE
                           Versus
                     STATE OF GUJARAT
==========================================================
Appearance:
LD.SR.ADV.MR.TUSHAR HEMANI ASSISTED BY HIREN J TRIVEDI(8808)
for the Petitioner(s) No. 1
ADVANCE COPY SERVED TO GOVERNMENT PLEADER/PP for the
Respondent(s) No. 1
MS POOJA ASHAR, ASST.GOVERNMENT PLEADER for the Respondent(s)
No. 2,3
NOTICE SERVED BY DS for the Respondent(s) No. 1,4
==========================================================


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  C/SCA/21012/2019                                JUDGMENT DATED: 30/01/2023




 CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
       and
       HONOURABLE MR. JUSTICE SANDEEP N. BHATT

                            Date : 30/01/2023

                    COMMON ORAL JUDGMENT

(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)

1. This are the group of matters involving

identical questions of facts and law and

therefore, they are being decided by a

common judgment, where the facts are drawn

from the Special Civil Application No.21012

of 2019.

2. Brief facts leading to the present

petition under Articles 226 and 227 of the

Constitution of India are as follow:

2.1 The petitioner is in the business of

trading of various goods such as scraps,

confectioneries, cosmetics, tobacco, etc.

The respondent No.1 as the Commissioner of

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

the State Tax exercises the jurisdiction

under the provision of the Gujarat Value

Added Tax Act, 2003 ('the VAT Act'

hereinafter) and the Goods and Services Tax

Act, 2017 ('the GST Act' hereinafter).

2.2 The petitioner had local registration

and central tax registration as well.

During the year under consideration, the

petitioner worked out Input Tax Credit on

purchases made from registered dealer as

per Section 11 of the VAT Act. It had been

worked out on sales within the State of

Gujarat and sales made outside the State

under Section 3(a) of the Central Sales Tax

Act, 1956.

2.3 The petitioner had adjusted the output

tax liability against the Input Tax

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

available and submitted its return by

working out the said procedure for the

assessment year 2008-09.

2.4 A search operation had conducted at the

premise of the petitioner, which continued

from 24.01.2012 to 01.02.2012. Numerous

files were impounded by officers containing

purchase and sales bills, LR, Weigh Slips,

Transport receipts, etc. for the period

2008 to 2012.

2.5 The assessment proceedings for the year

2008-09 were commenced and notice for audit

assessment under Section 34(2) of the VAT

Act had been issued on 01.02.2012. It is

further averred that on 01.02.2012 the

residential house belonging to the mother

of the petitioner and a shop were attached

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

under Section 45(1) of the VAT Act. Totally

93 items were impounded and the list of the

same had been annexed.

2.6 Notice had been issued in Form 303 for

making assessment under Section 35 of the

VAT Act and a show cause notice dated

10.07.2012 was issued wherein it was

alleged that the petitioner was engaged in

billing activities only. The detail of the

purchases and the sales were called for

otherwise it was proposed that in absence

of production of them, the sales made

outside Gujarat were to be construed as

local sales.

2.7 It appears that another show cause

notice dated 20.09.2012 was issued that has

been responded too by the petitioner

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

reiterating his submissions that all seized

documents have not been released after

eight months of the search and unless those

details are available with the petitioner,

giving of an opportunity will be an empty

formality.

2.8 Once again, show cause notice of

01.10.2013 was issued asking the petitioner

to remain present with all the details. The

petitioner since could not produce the 'C'

Forms and other details like Form 402, the

Assistant Commissioner of Commercial Tax

raised the demand by treating the entire

interstate sale as the local sale.

2.9 This was challenged by preferring First

Appeal before the Deputy Commissioner of

Commercial Tax, Appeal-2, Ahmedabad. The

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

petitioner was asked to pay pre-deposit of

20% of the total demand under the VAT Act

and under the CST Act, which the petitioner

failed to pay and appeal was summarily

dismissed on 17.04.2014. Aggrieved

petitioner preferred an appeal before the

Tribunal. The Tribunal after hearing both

the sides also had directed on 08.04.2015

the amount of 20% of the total demand to be

paid as pre-deposit thereby confirming the

directions of the First Appellate

Authority.

2.10 The petitioner was not in a

position to pay the amount of pre-deposits

and had also closed its business and

shifted to Rajasthan owing to the fact

that, its registration had been cancelled.

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

2.11 In subsequent assessment years for

2010-11 and 2011-12 the similar orders were

passed. It appears that the Appellate

Authority for the subsequent assessment

years 2010-11 and 2011-12 had permitted,

acceding to the request of the petitioner,

15% of the tax amount to be paid by way of

pre-deposits. The First Appellate Authority

also had given a substantial relief to the

petitioner where the total demand of

Rs.15.81 Crore (rounded off) is reduced to

Rs.19.81 Lakh (rounded off) for the

assessment year 2010-11 and for assessment

year 2011-12 Rs.10.85 Crore to Rs.8.54

Lakh. Therefore, the petitioner is before

this Court seeking the following reliefs:

"30...

(A) YOUR LORDSHIPS may be pleased to issue a writ of mandamus or writ in the nature of mandamus or

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

any other writ, orders or directions to quash and set aside the impugned order dated 15.06.2015 (at Annexure-I) passed by the Hon'ble Tribunal and relegate the appeals of the petitioner to the First Appellate Authority to be decided on merits without insisting for any further pre-deposit;

(B) During the pendency and Final Disposal of the present petition YOUR LORDSHIPS may be pleased to issue orders or directions to stay further implementation and execution of order dated 15.06.2015 (at Annexure-I) and direct the respondent-authorities not to take any coercive actions pursuant to order dated 15.06.2015; (C) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case."

3. Further affidavit on behalf of the

petitioner is also on record seeking to

urge that the challenge is to the order of

Tribunal dated 15.06.2015 directing the

petitioner to pay 20% of the entire amount.

The petitioner has also expressed his

inability to pay this much of amount due to

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

the severe physical ailments and of

spondylosis at L4 L5 level which compresses

the existing nerve system. All other

details are not necessary to be gone into.

However, he has also given the details of

ailment of his father and of a poor

financial condition.

4. Affidavit-in-reply is filed by the

Assistant Commissioner of State Tax

Enforcement, Division-2 is on record where

has contended that pursuant to the

dismissal of the Second Appeal by the

Tribunal on 15.06.2015, the process is

initiated for recovery of legitimate dues

payable by the petitioner. The respondent

already attached the commercial premises in

the year 2014 and thereafter, in 2015 they

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

have attached the shares of India Info Line

Limited, Aditya Birla Limited, etc.

4.1 The Coordinate Bench in case of a

sister concern, according to the

respondent, had dismissed the petition with

cost, where the facts are similar.

5. We have heard the learned senior

advocate, Mr.Tushar Hemani assisted by the

learned advocate, Mr.Hiren Trivedi for the

petitioner and learned AGP, Ms.Ashar for

respondents.

6. At the outset, our attention is drawn

to the order of the Appellate Authority for

the year 2010-11 and 2011-12 as also the

order dated 29.06.2019 under Section 73 of

the VAT Act, whereby the authority

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

concerned had permitted the payment of pre-

deposit of 15% of the tax amount. The First

Appellate Authority also had adjudicated

the matter and as a substantial reduction

from the total demand which had been raised

the concerned years. There had been no

challenge to the direction of 15% of the

tax amount during the pendency of the

adjudication. There is no reason as to why

in the case of the very assessee when for

the assessment years 2010-11 and 2011-12

the authority concerned had permitted the

payment of pre-deposit of 15% of the tax

amount. This be also not applied for the

earlier assessment years 2008-09 and 2009-

10 where the total demand made by the

assessing officer. These matters are

pending for adjudication for a long time on

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

account of the fact that these petitions

have been pending after the Court issued

the notice on 11.12.2019, nothing has moved

so far as those two years are concerned and

the matter has got entangled in this

litigation taking a que from the subsequent

year of 2010-11 and 2011-12.

7. Without entering into merit of the

matters and also the sheer reflects of time

also would necessiate for us to intervene

and direct the pre-deposit amount to be

quantified at the rate of 15% of the tax

demand raised by the respondent rather than

15% of the total amount fixed by the

Assessing Officer.

8. Accordingly, these petitions are

allowed by quashing and setting aside the

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

impugned order dated 15.06.2015 passed by

the Tribunal and relegating the petitioner

to the First Appellate Authority for the

deposit of 15% of the tax amount within a

period of four weeks from the date of

receipt of a copy of this order. The

authority concerned is directed to accept

the pre-deposits of 15% of the tax demand.

This reduction of 15% of the tax demand

rather than of the total demand shall be

paid within a period of four weeks from the

date of receipt of a copy of this order.

Once deposited, let the adjudication take

place by affording an opportunity in

accordance with law. If not deposited,

consequential order shall follow. The order

passed by this Court in Special Civil

Application Nos.16901 of 2014 with Special

C/SCA/21012/2019 JUDGMENT DATED: 30/01/2023

Civil Application No.6182 of 2015 has been

pressed into service. However, that being

the case of the sister concern, presently

not being dilated as in case of the very

assesssee as mentioned hereinabove, the

authority concerned has taken a specific

stand.

9. None of the observations shall come in

the way of either side in the matter to be

adjudicated on merit.

(SONIA GOKANI, J)

(SANDEEP N. BHATT,J) M.M.MIRZA