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2015 (4) TMI 701 - GUJARAT HIGH COURT

2015 (4) TMI 701 - GUJARAT HIGH COURT - [2015] 82 VST 224 (Guj) - Validity of Tribunal's order - Tribunal decided appeal on merits instead of dismissing it for non deposit of pre deposit order - Held that:- Tribunal is bound to obey the decision of the High Court. It is not open for the learned tribunal to ignore the directions, observations or orders passed by the High Court. If instead of the learned tribunal any other person would have ignored the order passed by the High Court it would tanta .....

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onourable Mr. Justice M. R. Shah) 1. The present Tax Appeal is ADMITTED to consider the following substantial questions of law; (A) Whether the Tribunal erred in adjudicating on merits despite first appellate authority adjudicated only on the issue of pre-deposit? (B) Whether the Tribunal erred in not directing that for computing interest liability for subsequent year the assessee will not get benefit of carried forward input tax credit? 2. Ms. Vaibhavi Parikh, learned advocate has appeared on b .....

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round of non deposit of pre-deposit, the learned tribunal instead of considering the legality and validity of the order passed by the first appellate authority dismissing the appeal on non payment of the amount of pre-deposit has entered into the merits of the case and has decided the appeal before it as if the appeal before it was against the order passed by the first appellate authority on merits. 4. Ms Vaibhavi Parikh, learned advocate appearing on behalf of the respondent-dealer is not in a .....

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t to have concentrated only on the order passed by the first appellate authority dismissing the appeal not on merits but on non deposit of the amount of pre-deposit. The learned tribunal as such was required to consider the legality and validity of the order passed by the first appellate authority with respect to the amount of pre-deposit and / or dismissing the appeal on non payment of pre-deposit as directed earlier. From the impugned judgment and order passed by the learned tribunal, it appea .....

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arned advocates appearing on behalf of the respective parties have brought to our notice number of decisions of this Court quashing and setting aside similar orders passed by the learned tribunal by which in appeal against the order passed by the first appellate authority dismissing the appeal on non deposit of pre-deposit, the learned tribunal entered into the merits of the case and decided the appeal. 6.1 In Tax Appeal No.711/2013 in the case of State of Gujarat Vs. Tudor India Ltd. as such th .....

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authority has rejected the case of assessee on the ground of pre deposit, instead of considering the request of deposit of pre deposit, such determination of the entire appeal by the Tribunal at the such juncture, in our opinion, is not a desirable approach. We may not choose to interfere in all such cases where the Tribunal has straightway chosen to decide the matter on merit instead of determining issue of pre deposit which was at large before it. However, so as to ensure that a dent is made .....

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e authority, either side is entitled to challenge such reasonings before the second appellate authority. Not only the parties and the second appellate authority would be deprived of the reasonings of the first appellate authority but chance of either sides of availing the opportunity of appeal on merit also gets marred by this process. Even if it is felt by the Tribunal that the issue is covered by the decision of the higher forum, it can always direct the parties to agitate these aspects before .....

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r the Tribunal to take into consideration the law on the subject and decide the validity of the order of directing or not directing the amount of pre deposit. However, that would not ipso facto entitle the Tribunal to give a complete go bye to the well laid down procedures of law as also such requirement of pre deposit and decide the matter on merit. We are also backed in our conclusion by another decision of the Apex Court rendered in case of Commissioner of C.Ex., Chandigarh v. Smithkline Beec .....

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] had not gone into the merits. Therefore, the only question before the Tribunal was whether pre deposit was required or not. The Tribunal has chosen to go into the merits and decided the appeal on merits also. This should not have been done." 8.2 It is not the case of either side that an identical question of law was pending before the Tribunal in some other appeals concerning the very assessee, or identical question of law in respect of very assessee for different assessment year was befo .....

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t appeal is directed to be remitted back to the Tribunal to decide the issue of pre deposit and on deciding the same to the first appellate authority which shall decide the same on merit in accordance with law. Needless to say that the law on the subject shall govern the decisions of these authorities, while deciding both the issues ie., pre deposit so also on the question of merit." 6.2 Even subsequently also in number of cases different Division Benches had set aside the similar orders pa .....

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learned tribunal to ignore the directions, observations or orders passed by the High Court. If instead of the learned tribunal any other person would have ignored the order passed by the High Court it would tantamount to Contempt of Court. However, we refrain ourselves from making any observations and we rest the matter there with a hope that in future the learned tribunal will absolutely follow the decision of this Court, more particularly, in Tax Appeal No.711/2013 and other subsequent decisi .....

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