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2024 (2) TMI 662 - HC - VAT and Sales TaxWaiver of pre-deposit condition or grant right to appeal subject to a part-deposit or security - usage/lease rental charges are not being paid by the aforesaid holding company i.e., WWIL, which is now before the National Company Law Appellate Tribunal - Section 63(4) of KVAT Act - HELD THAT:- The judgments in Hare Krishna Enterprises Vs. State of Karnataka and others [2023 (3) TMI 1458 - KARNATAKA HIGH COURT] and Bharat Electronics Ltd Vs. State of Karnataka and others [2016 (4) TMI 609 - KARNATAKA HIGH COURT] will clearly indicate that it cannot be said that this Court while exercising its power under Article 226 of the Constitution of India is powerless either to reduce the quantity of pre-deposit or to waive it completely depending on the facts obtaining in the specific cases. Insofar as the judgments relied upon by learned HCGP is concerned, the same were rendered in the facts and circumstances obtaining in the said case and no ratio, much less any principle of law is laid down to the effect that this Court does not have powers / jurisdiction under Article 226 of the Constitution of India to waive / reduce the pre-deposit. Depending on the peculiar / special facts and circumstances of a case, it is always open for this Court to waive / reduce, etc., the pre-deposit condition prescribed under Section 63 (4) of the KVAT Act, especially in the light of the judgment of this Court in Hare Krishna Enterprises’ case and Bharat Earth Movers Limited - In the instant case, the material on record discloses that the petitioner has not earned any revenue for over five years and being a holding company, petitioner is also undergoing corporate insolvency resolution process / proceedings. Further, moratorium has been declared as long back as on 20.02.2018 and there is complete and total financial instability insofar as the petitioner is concerned as is clear from the financial statements produced by the petitioner, which is sufficient to come to the conclusion that the petitioner is not in a position to pay any amount for the purpose of maintaining the appeal, much less pre-deposit of 30% as required under Section 63(4) of the KVAT Act. The cumulative effect of the facts and circumstances narrated and the judgments of this Court in BEML’s case and Hare krishna Enterprises case is sufficient to come to the conclusion that in the peculiar / special facts and circumstances obtaining in the case on hand including the financial distress and inability on the part of the petitioner to make payment of 30% pre-deposit. Petitioner is permitted to maintain and prosecute Sales Tax Appeal No. 400/2018 before the Karnataka Appellate Tribunal, Bengaluru, which is hereby directed to entertain the appeal and pass appropriate orders on merits without insisting for payment of 30% pre-deposit, in accordance with law, as expeditiously as possible - Petition allowed.
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