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State of Gujarat Versus Essar Oil Ltd.

2015 (5) TMI 946 - GUJARAT HIGH COURT

Waiver of pre deposit - Validity of order passed by Tribunal - Tribunal directed the first appellate authority to disposed of the matter in the light of decision in the case of ONGC within 3 months - Held that:- State of Gujarat brought it to the notice of the learned Tribunal that the decision of the learned Tribunal in the case of ONGC is challenged before the High Court and the High Court has admitted the appeals and the appeals are pending for final disposal and therefore, the High Court is .....

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the case of ONGC Limited.

Once it was brought to the notice of the learned Tribunal that the appeals against its decision in the case of ONGC Limited are pending before this Court and this Court is seized with the matter, even to avoid any further multiplicity of proceedings, the learned Tribunal could not have insisted for disposing of the appeals by the first appellate authority following its earlier decision in the case of ONGC Limited, which are the subject matter of appeals befo .....

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al appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013 i.e. ₹ 18,69,75,730/- on furnishing unconditional and irrevocable Bank Guarantee of the like amount in the name of the Commissioner of Commercial Tax, it will make the ends of justice and it will protect the interest of both the parties. - Decided partly in favour of Revenue. - Tax Appeal No. 254 of 2015, Civil Application (OJ) No. 321 of 2015, Tax Appea .....

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ial Civil Applications, all these tax appeals as well as Special Civil Applications are heard, decided and disposed of together by this common judgment and order. 2. Feeling aggrieved by and dissatisfied with the impugned judgment and order passed by the learned Value Added Tax Tribunal, Ahmedabad (for short "learned Tribunal") dated 26.8.2014 passed in First Appeal Nos.11 and 12 of 2013 as well as common order passed by the learned Tribunal dated 20.2.2015 passed in Misc. Applications .....

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ort "the VAT Act") as well as under the Central Sales Tax Act (for short "the CST Act"). As per the assessment order passed against the respondent - M/s Essar Oil Limited under the VAT Act, the respondent is liable to pay ₹ 591,67,61,310/-, which inter alia includes the tax amount of ₹ 334,28,0,3000/-, interest of ₹ 240,68,18,160/- and the penalty of ₹ 16,71,40,150/-. It appears that the amount of ₹ 2,11,121/- was recovered through the bank attac .....

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ealer - M/s Essar Oil Limited, preferred two appeals before the first appellate authority - Joint Commissioner of Commercial Tax. That the first appellate authority passed an order directing the respondent herein - original appellant - dealer to deposit 20% of the tax demands and furnish guarantee for the remaining demands raised as a result of the assessment orders passed by the Assessing Officer, as pre-deposit and before the appeals are considered on merits. That feeling aggrieved by and diss .....

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ned Tribunal passed the following interim order on 25.6.2013. (page 29/2). "1) The appellant is directed to pay ₹ 5 crores to the Department forthwith. 2) The appellant is further directed to furnish the Bank Guarantee of 5% of the total tax demand (exclusive of interest and/or penalty) both under the Gujarat VAT Act as well as under the CST Act immediately. 3) The appellant is further directed to pay 5% of the amount, of total tax demand (exclusive of interest and/or penalty), both u .....

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is further made clear that if the appellant commits any default in making compliance with the aforesaid conditions, stay granted as above shall stand vacated and it would be open for the department to reimpose the bank attachment on the bank accounts of the appellant. 6) It is also made clear that all the observations made hereinabove are prima facie in nature and the same may not have any bearing on the appeals of the appellant which are pending before the first appellate authority or on any ot .....

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d Tribunal. That in the meantime, in another case, in the case of ONGC Limited, the learned Tribunal had an occasion to consider the similar issue and held against the revenue. Therefore, though the tax appeals before the learned Tribunal were against the orders passed by the first appellate authority of pre-deposit only, the learned Tribunal without considering the legality and validity of the order of the first appellate authority of pre-deposit, allowed the aforesaid appeals and quashed and s .....

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at if the learned Joint Commissioner of Commercial Tax fails to decide the appeals within a period of three months from the date of receipt of the said order, in that case, the amount paid by the respondent - original appellant as a result of the interim order passed by the learned Tribunal on 25.6.2013 shall be refunded to the original appellant - respondent herein forthwith. The learned Tribunal also clarified that the respondent - original appellant shall not be required to furnish the renewa .....

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on by the learned Tribunal in the oder dated 26.8.2014 directing the first appellate authority to decide the appeals within three months after considering the decision of the Tribunal in the case of ONGC Limited, to avoid any further multiplicity of proceedings, the State preferred Misc. Application Nos.33 and 34 of 2015 before the learned Tribunal requesting the learned Tribunal to recall the judgment and order dated 26.8.2014 passed in First Appeal Nos.11 and 12 of 2013 or to modify the said j .....

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nly dismissed the said applications but even refused to modify its earlier order, by which, the first appellate authority was directed to decide the first appeals within three months and to consider the decision of the Tribunal in the case of ONGC Limited, which is the subject matter of appeals before this Court. The learned Tribunal in the applications filed by the State had directed the State to refund the amount, which the respondent - original appellant deposited pursuant to the interim orde .....

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passed in Misc. Application Nos.33 and 34 of 2015, the State through Commissioner of Commercial Tax preferred present tax appeals as well as Special Civil Applications. 4. Shri PK Jani, learned Additional Advocate General appearing with Mrs. Manisha Lavkumar, learned GP has vehemently submitted that the impugned judgment and order passed by the learned Tribunal passed in First Appeal Nos.11 and 12 of 2013 as well as Misc. Application Nos.33 and 34 of 2015 insofar as directing the first appellat .....

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unal in the case of ONGC Limited before this Court was pointed out to the learned Tribunal by way of Misc. Applications, however and despite the fact that the learned Tribunal was aware of the fact that the appeals against the decision of the learned Tribunal in the case of ONGC Limited are admitted and pending final disposal before this Court, the learned Tribunal, has still directed the first appellate authority to decide the appeals on remand within a period of three months and that too after .....

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ty, the first appellate authority is bound to decide the appeals against the revenue and in favour of the dealer considering the order of the learned Tribunal in the case of ONGC Limited and thereafter, the State is required to prefer appeal before the learned Tribunal and thereafter, after following the decision in the case of ONGC Limited, the learned Tribunal dismissed the appeal, in that case, the State would be required to prefer appeals before this Court. Instead of that, if the appeals ar .....

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for the State that even otherwise, the learned Tribunal has materially erred in directing the State to refund the amount, which the respondent - original appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013. It is submitted that when the issue was at large before this Court, instead of directing the appellant State to refund the amount deposited by the respondent herein - original appellant, the learned Tribunal c .....

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591,67,61,310/- and 68,23,43,962/- respectively. It is submitted that against which, as such, pursuant to the earlier interim order passed by the learned Tribunal, the respondent - dealer had deposited only ₹ 18,69,75,730/- and with respect to that also, the learned Tribunal has passed an order directing the appellant to refund the said amount to the respondent. 4.4 It is further submitted by Shri PK Jani, learned Additional Advocate General that even otherwise, the directions issued by t .....

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verse, which cannot be sustained. It is submitted that in the applications preferred by the State, the learned Tribunal ought not to have passed such order and/or could not have and ought not to have issued such direction. 4.5 Making above submissions, it is requested to allow the present tax appeals as well as the Special Civil Applications and granted the relief as prayed. 5. Shri SN Soparkar, learned senior counsel has appeared with Shri Uchit Sheth on behalf of the respondent - dealer Essar .....

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e first appellate authority to decide the appeals within three months after following the decision of the learned Tribunal in the case of ONGC Limited is quashed and set aside. 5.2 He has also stated at bar, under the instructions, that the respondent - dealer - original appellant is ready and willing to furnish the unconditional and irrevocable Bank Guarantee for ₹ 18,69,75,730/- in the name of the Commissioner of Commercial Tax within a period of seven days from today and on furnishing B .....

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ctions that the respondent - dealer - original appellant has no objection if the order passed by the learned Tribunal dated 20.2.2015 passed in Misc. Application Nos.33 and 34 of 2015, by which the learned Tribunal has directed the appellant to refund/return the amount, which the respondent - original appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013 with interest at the rate of 18% per annum, is set aside and/o .....

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of 2013, however ultimately, he has left it to the Court with a request to strike the balance and protect the interest of the revenue also. 7. Heard learned advocates appearing on behalf of the respective parties. 7.1 At the outset, it is required to be noted that what is challenged in the present tax appeals and the respective Special Civil Applications in the impugned judgment and order passed by the learned Tribunal dated 26.8.2014 passed in First Appeal Nos.11 and 12 of 2013 as well as the .....

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n the amount, which the respondent - original appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013 and that too with 18% interest on completion of 15 days from the order dated 20.2.2015. 7.2 At the outset, it is required to be noted that as such, the appeals before the learned Tribunal were against the order of pre-deposit passed by the first appellate authority i.e. order passed by the first appellate authority di .....

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3, the learned Tribunal passed the following order: "1) The appellant is directed to pay ₹ 5 crores to the Department forthwith. 3) The appellant is further directed to furnish the Bank Guarantee of 5% of the total tax demand (exclusive of interest and/or penalty) both under the Gujarat VAT Act as well as under the CST Act immediately. 3) The appellant is further directed to pay 5% of the amount, of total tax demand (exclusive of interest and/or penalty), both under the Gujarat VAT Ac .....

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hat if the appellant commits any default in making compliance with the aforesaid conditions, stay granted as above shall stand vacated and it would be open for the department to reimpose the bank attachment on the bank accounts of the appellant. 6) It is also made clear that all the observations made hereinabove are prima facie in nature and the same may not have any bearing on the appeals of the appellant which are pending before the first appellate authority or on any other appeals pending bef .....

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ed is squarely covered by its earlier decision in the case of ONGC Limited and appeals before it were against the order of pre-deposit only. The learned Tribunal has remanded the matter to the learned first appellate authority by quashing and setting aside the order passed by the first appellate authority of pre-deposit and granting unconditional stay of recovery during the pendency of the appeals by the first appellate authority. To that extent, there cannot be any difficulty and/or any fault c .....

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with. That thereafter, the appellant - State preferred Misc. Applications before the learned Tribunal being Misc. Application Nos.33 and 34 of 2015 in the aforesaid First Appeal Nos.11 and 12 of 2013 requesting the learned Tribunal to recall the judgment and order dated 26.8.2014 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013 or to modify the said judgment and order in such a manner that it does not impose any outer limit for deciding the first appeals pending before the fi .....

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smissed the said applications by not removing the outer time limit fixed by it directing the first appellate authority to decide the appeals within a period of three months after following its earlier decision in the case of ONGC Limited, reiterated again and directed the first appellate authority to decide the appeals within stipulated time after following its decision in the case of ONGC Limited. Not only that, but in the said Misc. Applications preferred by the State, the learned Tribunal by .....

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sal and the High Court is seized with the matter, we fail to appreciate the anxiety on the part of the learned Tribunal to dispose of the appeals by the first appellate authority following its earlier in the case of ONGC Limited. Once it was brought to the notice of the learned Tribunal that the appeals against its decision in the case of ONGC Limited are pending before this Court and this Court is seized with the matter, even to avoid any further multiplicity of proceedings, the learned Tribuna .....

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en adopted, in that case, the first appellate authority shall have to decide the appeals after following the decision in the case of ONGC Limited; thereafter, the aggrieved party would have to prefer appeal before the learned Tribunal and the learned Tribunal also may have to follow its own decision in the case of ONGC Limited and thereafter, the aggrieved party shall have to prefer appeal before the High Court. Instead, if the first appellate authority waits till the decision by the High Court .....

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to decide the appeals by the first appellate authority would have been deleted, the respondent - original appellant was not to suffer, as such as, the learned Tribunal had already continued/granted stay against the recovery of the demand during the pendency and final disposal of the first appeals by the first appellate authority. Under the circumstances, the judgment and order passed by the learned Tribunal directing the first appellate authority to decide the appeals before it within a period o .....

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ng the decision of the Tribunal in the case of ONGC Limited is quashed and set aside. 7.5 In the Misc. Applications preferred by the appellant State, the learned Tribunal has directed the appellant State to refund/return the amount deposited by the respondent - original appellant pursuant to the interim order/direction dated 25.6.2013 passed in First Appeal Nos.11 and 12 of 2013 with interest at the rate of 18% per annum. The aforesaid order/ direction is absolutely beyond the scope and ambit of .....

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- original appellant deposited with interest at the rate of 18% per annum. 7.6 Now, the only issue to be decided is the order passed by the learned Tribunal directing the respondent - original appellant to return/refund the amount, which the respondent - original appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013. Shri Soparkar, learned senior counsel appearing on behalf of the respondent - original appellant has .....

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asonable in the facts and circumstances of the case. We are of the opinion that if the respondent - original appellant is permitted to withdraw the amount, which the respondent - original appellant deposited pursuant to the interim order dated 25.6.2013 passed by the learned Tribunal in First Appeal Nos.11 and 12 of 2013 i.e. ₹ 18,69,75,730/- on furnishing unconditional and irrevocable Bank Guarantee of the like amount in the name of the Commissioner of Commercial Tax, it will make the end .....

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irecting the first appellate authority to decide the appeals pending before it within a period of three months and to follow the judgment of the Tribunal in the case of ONGC Limited as well as the direction issued by the learned Tribunal in the order dated 20.2.2015 in Misc. Applications No.33 and 34 of 2015 directing the respondent - original appellant to refund the amount of ₹ 18,69,75,730/- (the amount deposited by the respondent - original appellant pursuant to the interim order/direct .....

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