TMI Blog2022 (5) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... or interest or both, in dispute and that appeal under the OET Act is required to be accompanied by satisfactory proof of payment of admitted tax in full and twenty per centum of the tax or interest or both, in dispute. In THE BENGAL IMMUNITY COMPANY LIMITED VERSUS THE STATE OF BIHAR AND OTHERS [ 1955 (9) TMI 37 - SUPREME COURT] , the Hon ble Supreme Court has observed that if there is any hardship, it is for the Parliament to amend the law, but the Court cannot be called upon to discard the cardinal rule of interpretation for mitigating a hardship. If the language of an Act is sufficiently clear, the Court has to give effect to it, however, inequitable or unjust the result may be. As is said, dura lex sed lex which means the law is hard but it is the law . Even if the statutory provision causes hardship to some people, it is not for the Court to amend the law. A legal enactment must be interpreted in its plain and literal sense as that is the first principle of interpretation. Since statutory deposits as discussed in the foregoing paragraphs were not made, the appeals were rejected summarily. Summary rejection orders were carried in revision before the Commissioner of Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from 01.04.2012 to 30.09.2015 under assessment for entertainment of appeals. 3. The petitioner, M/s. Sumanshree Decoratives, dealing in cement, M.S. rod, marble, granite, chequered tiles, cadapah stone, etc. unfurls the fact by way of writ petition that the assessments under Section 43 of the OVAT Act and Section 10 of the OET Act were undertaken pursuant to report submitted by the Deputy Commissioner of Sales Tax, Vigilance, Koraput Division, Jeypore and without affording due and reasonable opportunity to the petitioner the opposite party No.2 raised huge demands which stand as follows: OVAT Act OET Act Tax Rs. 52,58,588.00 Rs. 7,65,936.00 Penalty Rs. 1,05,17,176.00 Rs. 15,31,872.00 Total Rs. 1,57,75,764.00 Rs. 22,97,808.00 3.1. The petitioner challenging the assessment orders dated 30.05.2017 passed under Section 43 of OVAT Act and Section 10 of the OET Act approached this Court by way of filing writ being W.P.(C) Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate authority to the effect that the financial health of the business does not permit it to deposit the amounts. The appellate authority while rejecting the appeals, merely observing that by way of filing written submission dated 10.04.2019, the petitioner expressed inability to make deposits as per requirement of the statutes. 3.6. The orders of summary rejection of appeals being carried in revision by the petitioner before the Commissioner of Sales Tax-opposite party No.1, no fruitful purpose was served. The Commissioner of Sales Tax-revisional authority referring to Jindal Stainless Ltd. Vrs. State of Odisha, (2012) 54 VST 1 (Ori), held that when the statute prescribes a mandatory pre-deposit for the appeal to be admitted; it needs to be complied with and consequently, refused to interfere with the orders of the appellate authority. 4. Mr. Mukesh Agarwal, learned counsel for the petitioner urged that neither the appellate authority nor the revisional authority did consider material placed on record. The authorities-opposite parties ought not to have rejected the merits of the appeal at the altar of defect or deficiency. The financial stress of the business tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution of India and answered as follows: 25. Therefore, it becomes crystal clear that appeal is a statutory remedy and the same is maintainable provided that the Statute enacted by a competent Legislature provides for it. Further, there can be no quarrel that the right of appeal cannot be absolute and the Legislature can put conditions for maintaining the same. 26. For the reasons stated above, the decisions relied upon by the petitioner are of no help to the petitioner as those decisions are rendered in respect of particular facts of that case. 27. In view of the above, we are of the considered view that the provisions of Section 77(4) of the OVAT Act requiring deposit of 20% of the tax or interest or both in dispute as a precondition for entertaining an appeal against the order enumerated under Section 77(1) of the OVAT Act does not make the right of appeal illusory and such a condition is within the legislative power of the State Legislature and cannot be held to be unreasonable and violative of Article 14 of the Constitution. 8. Before proceeding further in the matter it is relevant to gloss through the relevant provisions of the statutes which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as amended in the Odisha Value Added Tax (Amendment) Act, 2017. Nonetheless, there being no amendment to sub-section (4) of Section 16 of the OET Act, the petitioner is required to deposit 20% of the tax in dispute for the purpose of entertainment of appeal. 9.2. This Court in Indian Oil Corporation Vrs. Odisha Sales Tax Tribunal, Cuttack, 2009 (Supp.1) OLR 928 = 109 (2010) CLT 355 , made the following observations: 7. Further, there can be no quarrel to the settled legal proposition that right of appeal may not be absolute. The Legislature can put conditions for maintaining the same. In Vijay Prakash D. Mehta Jawahar D. Mehta Vrs. Collector of Customs (Preventive), Bombay, AIR 1988 SC 2010, the Hon ble Apex Court held as under: Right of appeal is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi judicial adjudications. The right to appeal is a statutory right and it can be circumscribed by the conditions in the grant... If the statute gives a right to appeal upon certain conditions, it is upon fulfilment of these conditions that the right becomes vested and exercisable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish Maheshwari Vrs. Assistant Commissioner of Income-tax ors., AIR 2007 SC 1696; Southern Petrochemical Industries Co. Ltd. Vrs. Electricity Inspector ETIO ors., AIR 2007 SC 1984; and Bhavya Apparels (P) Ltd. anr. Vrs. Union of India anr., (2007) 10 SCC 129. 13. In view of the above, it becomes evident that the appeal is a statutory right, which can be created only by the Legislature and it does not lie by acquiescence/consent of the parties or even the writ Court is not competent to create the appellate forum if not provided under the statute. If Legislature in its wisdom has imposed certain conditions, like pre-deposit for the purpose of filing or hearing of the appeal, the Courts are supposed to give strict adherence to the statutory provisions. The purpose of imposing the pre-deposit condition is that right of appeal may not be abused by any recalcitrant party and there may not be any difficulty in enforcing the order appealed against if ultimately it is dismissed. There must be speedy recovery of the amount of tax due to the authority. 9.3. Such consistent approach can be traced out in recent Judgment being ECGC Limited Vrs. Mukul Shriram EPC JV, 2022 SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isional authority in exercise of power under Section 79(2) of the OVAT Act and Section 18(3) of the OET Act are hereby confirmed. The question for consideration as posed above is answered accordingly. 11. The petitioner in the alternative has made innocuous prayer for extending the benefit of pursuing remedy of appeal on deposit of 10% of the tax in dispute under the OVAT Act and 20% of the tax in dispute under the OET Act. This Court finds such a proposition mete and proper as the same would in no manner prejudice rights of either sides, nor do the authorities get influenced in any manner by any of the observations in deciding the case on its own merits. It is also submitted that after demand of tax and penalty being served on the petitioner-dealer, the petitioner has made certain deposits with the Department towards OVAT and OET. 11.1. Counsel for the petitioner has submitted that it has deposited certain amounts after demands being raised in the assessments and prayed for consideration of the same towards discharge of pre-deposit. 11.2. In VVF (India) Limited Vrs. State of Maharashtra and others, 2021 SCC OnLine SC 1202 , the Hon ble Supreme Court of India has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, as set out in clauses (a) to (d) of Section 26(6A). The second reason which weighed with the High Court, is that any payment, which has been made albeit under protest, will be adjusted against the total liability and demand to follow. Neither of these considerations can affect the interpretation of the plain language of the words which have been used by the legislature in Section 26(6A). The provisions of a taxing statute have to be construed as they stand, adopting the plain and grammatical meaning of the words used. Consequently, the appellant was liable to pay, in terms of Section 26(6A), 10 per cent of the tax disputed together with the filing of the appeal. There is no reason why the amount which was paid under protest, should not be taken into consideration. It is common ground that if that amount is taken into account, the provisions of the statute were duly complied with. Hence, the rejection of the appeal was not in order and the appeal would have to be restored to the file of the appellate authority, subject to due verification that 10 per cent of the amount of tax disputed, as interpreted by the terms of this judgment, has been duly deposited by the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act provides that the First Appellate Authority may, on application filed by the dealer within the prescribed period, stay the realization of balance tax, interest or penalty, under dispute, either in part or in full, till disposal of the first appeal. It is seen that the First Appellate Authorities, while disposing stay applications of dealers, generally order for payment of some more amount of tax, interest or penalty in addition to the mandatory pre-deposit. Very often the dealers approach the Commissioner, under Section 79(2) of the Act, seeking revision of the stay order of the First Appellate Authorities. In some cases, not being satisfied with the revision order of the Commissioner, the dealers do also approach the Hon ble High Court for a favourable order. Therefore, in order to avoid unnecessary litigations, it is hereby advised that First Appellate Authorities, while disposing stay applications of dealers pertaining to VAT, CST and ET demands, should not insist on payment of tax, interest or penalty beyond the mandatory pre-deposit amount. Accordingly, stay applications should be disposed of quickly (grant of stay on the balance demand, as applied by the dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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