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2015 (11) TMI 1147 - HC - VAT and Sales TaxLevy of tax under MVAT Act - Petitioner engaged in providing network connectivity services to its closed group of customers - Held that:- The first appellate authority would have to decide as to whether the Petitioner could be subjected to the levy under the MVAT Act. In other words, the applicability of the Act to the business of the Petitioner would have to be determined first. If the Petitioner contends there is absolutely no transfer of any goods or even any right to use the goods during the course of rendering of the services, then, that argument will have to be considered seriously and dealt with. That would have to be dealt with in the backdrop of the scheme of the Act and the object and purpose sought to be achieved by it. - imposition of a condition of pre-deposit would denote as to how the authorities have prima facie prejudged the issue raised for their consideration. If there is an arguable point and a strong prima facie case, then, other aspects come into play and namely how the rights and equities have to be balanced. They could have been balanced in the given circumstances by not imposing a condition of cash deposit but to provide security and to the satisfaction of the authority. That would ensure, in the event the Petitioner is held liable to pay the tax that, that amount can be recovered by adjusting the security and also by initiating every means of payment. At least some amount then is available for recovery. - Petitioner will furnish a bank guarantee - Petition disposed of.
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