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2014 (8) TMI 140 - GUJARAT HIGH COURTDisallowance of tax credit - To avoid demand of purchase tax assessee created bogus purchase bills from registered dealers and availed tax credit on the sales tax shown to have been paid by them - Commissioner dismissed appeal for non compliance of pre deposit condition - Tribunal partly allowed appeal by setting aside credit and tax and remanded the matter related to penalty back - Held that:- order under challenge before the Tribunal was one passed by the appellate Commissioner dismissing the appeals of the appellant for want of pre-deposit. The Commissioner insisted that the appellant must deposit ₹ 23,00,400/- by way of pre-deposit. Scope of the appeal before the Tribunal was whether such condition imposed by the Commissioner was correct in law or not. If the Tribunal was of the opinion that the condition was validly imposed, it could have dismissed the appeals of the appellant. If on the other hand, the Tribunal, looking to the facts and circumstances of the case, was of the opinion that any lesser amount or no payment by way of pre-deposit was necessary, it could have provided so. If the appellant had fulfilled such modified condition of pre-deposit, the appellant's appeal would be ripe for hearing before the Commissioner. Under no circumstances, the Tribunal could have bypassed such first appellate authority and directly heard the appeals on merits of the order passed by the Assessing Officer. Firstly, in terms section 73(4) of the VAT Act, no appeal would lie before the Commissioner against an order of assessment unless such appeal is accompanied by satisfactory proof of payment of tax in respect of which the appeal has been preferred. Proviso to sub-section (4) to section 73 enables the appellate authority, for reasons to be recorded in writing, to entertain such appeal without payment of tax and penalty or on proof of payment of smaller some as may be considered reasonable or the appellant furnishing security for such amount as the appellate authority may direct. In terms of section 73(4) of the VAT Act, thus unless and until either the appellant pays the entire amount confirmed in the order appealed against or the appellate authority for the reasons to be recorded in writing relaxes such requirement in the manner noted above, it would not be possible for the appellate authority to entertain such appeal. The Tribunal simply had to decide whether the condition imposed by the Commissioner was proper and if not what further relaxation could be granted to the appellant. In the process, the Tribunal could not have examined the order of the Assessing Officer on merits as the first appellate authority. During the pendency of appeals before the Tribunal and thereafter before this Court, the appellant has deposited a total sum of approximately ₹ 42 lacs. This is far in excess of the pre-deposit amount suggested by the Commissioner.- Matter remanded back to Commissioner - Decided in favour of assessee.
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