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2000 (8) TMI 1080 - HC - VAT and Sales Tax
Issues:
Whether the Sales Tax Tribunal could require a surety bond for hearing an appeal under the State Act. Analysis: The main issue in this case was whether the Sales Tax Tribunal had the authority to demand the filing of a surety bond as a condition for hearing an appeal filed by the petitioners. The petitioners challenged an order passed by the Deputy Excise and Taxation Commissioner-cum-Revisional Authority, seeking to appeal without prior payment of tax and interest. The Tribunal directed the appeal to be entertained subject to the filing of a surety bond within one month. The court referred to a similar case and held that the appellate authority can impose conditions under the proviso to section 39(5) if it is satisfied that the appellant is unable to pay the tax. The court clarified that while the proviso does not expressly mention the imposition of a surety bond, the appellate authority has the discretion to impose appropriate conditions without insisting on a pre-deposit of tax. The court emphasized that the authority must consider each case individually and cannot apply a uniform requirement for a surety bond. The court also noted that the petitioners should have been given an opportunity to demonstrate their inability to furnish a surety bond before such a condition was imposed. Failure to provide this opportunity would violate the principles of natural justice. Consequently, the court allowed the writ petition, quashed the Tribunal's order, and directed a fresh decision on the application under section 39(5) after granting a hearing to the petitioners. In conclusion, the court ruled in favor of the petitioners, emphasizing the need for the appellate authority to exercise discretion in imposing conditions for hearing appeals without pre-deposit of tax. The court highlighted the importance of providing an opportunity for the petitioner to present evidence of their inability to comply with such conditions, ensuring adherence to the principles of natural justice.
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