Supreme Court of India
M/S. S.E. GRAPHITES PRIVATE LIMITEDversusSTATE OF TELANGANA & ORS.
- Citation
- 2019 INSC 743
- Decided
- 10 July 2019
- Disposal
- Disposed off
- Bench
- A M KHANWILKAR
Holding
The second proviso requires proof of payment of tax dues only when the appeal is first taken up for consideration, not at the time of filing, and the Appellate Authority must entertain the appeal if the deposit is made before that hearing.
Summary
The appellants, dealers under the Andhra Pradesh General Sales Tax Act, 1957 and the VAT Acts, filed appeals against assessment orders but were rejected by the Appellate Authority for not producing proof of payment of tax dues as required by the second proviso of the relevant statutes. The High Court dismissed their writ petitions, relying on the decision in Ankamma Trading Company, which mandated pre‑deposit of tax at the time of filing the appeal. The Supreme Court held that the second proviso is an independent condition that must be satisfied only when the appeal is first taken up for consideration, not at the time of filing, and that the appellant may deposit the tax dues any time before that first hearing. Consequently, the Court set aside the High Court judgment, restored the appeals to the Appellate Authority, and directed that every appeal be taken up for consideration within thirty days of filing. It also clarified that the doctrine of merger applies to orders passed after a special leave petition is granted. The Court dismissed appeals where the deposit was made after the appeal had already been rejected, and remanded other matters for fresh consideration.
Issues considered
- The interpretation of the second proviso of Sections 19/31 of the APGST/AVAT Acts regarding the timing of proof of payment of tax dues.
- Whether the pre‑deposit of tax dues is a condition precedent at the time of filing or at the first hearing of the appeal.
- The applicability of the doctrine of merger to orders passed after a special leave petition is granted.
- The power of the Appellate Authority to condone delay and to reject appeals for non‑compliance with the second proviso.
Legislation cited
- Andhra Pradesh General Sales Tax Act, 1957s. s.19, s. s.21(2)
- Andhra Pradesh Value Added Tax Act, 2005s. s.31, s. s.33(2)
- Telangana State Value Added Tax Act, 2005
Subjects
Tax lawAppellate authorityLimitation periodPre‑depositProof of paymentDoctrine of mergerStatutory interpretationVATSales taxCondonation of delay
Judgment
94 [2019]REPORTS
SUPREME COURT 9 S.C.R. 94 [2019] 9 S.C.R.
A M/S. S.E. GRAPHITES PRIVATE LIMITED
v.
STATE OF TELANGANA & ORS.
(Civil Appeal No.7574 of 2014)
B JULY 10, 2019
[A.M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Andhra Pradesh General Sales Tax Act, 1957 – Proviso to
s.19 and s.21(2) – Appellate Authority rejected the appeals
preferred by the concerned appellants-assessees under the
C
provisions of 1957 Act or 2005 VAT Act of AP or Telangana, as the
case may be – Appeals were dismissed inter alia on the ground that
the appellants failed to comply with the pre-condition of producing
proof of payment of tax admitted to be due for the relevant
assessment year in respect of which the appeal was preferred by
D the concerned appellant – Writ petitions filed by the appellants –
Dismissed by the High Court relying on the decision of the
co-ordinate bench in Ankamma Trading case – On appeal, held:
First proviso in s.19 of 1957 Act and s.31 of AP VAT Act, as the
case may be, pertains to limitation period “for filing” of an appeal
and discretion of the Appellate Authority to condone the delay in
E
filing such appeal, up to a maximum period specified therein –
Second proviso though part of the same section, is an independent
condition mandating the appellant to produce proof of payment of
tax dues in respect of which the appeal is preferred – Even the
High Court in Ankamma Trading Company had justly noted that the
F said proviso does not provide for any specific period within which
the tax dues should be paid – There is no express stipulation to
deposit the tax dues in respect of which the appeal is preferred, at
the time of its filing, institution or presentation as such – In the
absence of such clear stipulation, it is open to the assessee to file
the appeal within the statutory period of limitation provided
G
therefor and later on, deposit the specified tax dues but before the
appeal is taken up for consideration by the Appellate Authority for
the first time, be it for condonation of delay in filing the appeal
and/or to admit it on merits or otherwise –Proof of such payment
H
94
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 95
TELANGANA & ORS.
having been made could be produced thereat, failing which, the A
Appellate Authority will have to reject the appeal on that count –
Filing, institution or presentation of appeal in the office of the
Appellate Authority is an independent event than the appeal being
taken up for consideration “for the first time”– It is possible that
some unscrupulous litigant (assessee) may file appeal within the
B
limitation period but keep it under defect so that the same does not
proceed for consideration before the Appellate Authority – To
obviate such mischief, the Appellate Authority shall take up every
singular appeal for consideration for admission on merits and/or
for condonation of delay in filing the appeal for the first time, no
later than 30 days from the date of its filing, institution or C
presentation in its office – Direction be complied with by all
concerned meticulously, without any exception – Judgment of the
High Court set aside – Writ petitions allowed – Concerned appeals
stand restored to the file of the Appellate Authority and be
considered in accordance with law – AP VAT Act, 2005 – Second
D
Proviso to s.31 and Proviso to s.33(2) – Telangana State VAT Act,
2005 – Constitution of India – Art.136 – Doctrine of Merger –
Interpretation of Statutes.
Amdhra Pradesh General Sales Tax Act, 1957 – Power of the
Appellate Authority under 1957 and 2005 Act – Discussed – AP
VAT Act, 2005 – Telangana State VAT Act, 2005. E
Practice & Procedure – Filing, institution or presentation of
appeal vis-a-vis the appeal being taken up for consideration –
Difference between – Explained.
Disposing of the appeals, the Court F
HELD: 1.1 The first proviso in the concerned Section
(Section 19 and Section 31, as the case may be) pertains to
limitation period “for filing” of an appeal; and discretion of the
Appellate Authority to condone the delay in filing of such appeal,
up to a maximum period specified therein. Indeed, the second G
proviso is part of the same Section. However, it is an
independent condition and in one sense, mutually exclusive
condition mandating or enjoining the appellant to produce proof
of payment of tax dues in respect of which the appeal is
H
96 SUPREME COURT REPORTS [2019] 9 S.C.R.
A preferred. That obligation can be discharged until the appeal is
considered for admission and/or condonation of delay in filing of
the appeal, as the case may be, by the Appellate Authority for the
first time. Even the High Court in Ankamma Trading Company
had justly noted that the said proviso does not provide for any
specific period within which the tax dues should be paid.
B
Moreover, there is no express stipulation to deposit the tax dues
in respect of which the appeal is preferred, at the time of its
filing, institution or presentation as such. In the absence of such
a clear stipulation, it must necessarily follow that it is open to the
assessee to file the appeal within the statutory period of
C limitation provided therefor and later on, deposit the specified
tax dues but before the appeal is taken up for consideration by
the Appellate Authority for the first time – be it for condonation
of delay in filing the appeal and/or to admit it on merits or
otherwise. The proof of such payment having been made could
be produced thereat. Failing which, the Appellate Authority will
D
have no other option but to reject the appeal on that count. The
Appellate Authority has no power to extend the time to deposit
the specified tax dues. Suffice it to observe that, stricto sensu, the
said proviso is not a provision of pre-deposit at the stage of
filing, institution or presentation of the appeal as such; but is a
E provision stipulating payment of tax dues as a pre-requisite or
sine qua non for consideration of appeal on merits or otherwise
and/or for condonation of delay in filing the same, as the case
may be, for the first time. It is also to impose fetter on the
Appellate Authority from admitting the appeal for consideration
on merits. It is well recognized that filing, institution or
F
presentation of appeal in the office of the Appellate Authority is
an independent event than the appeal being taken up for
consideration “for the first time” for being admitted on merits or
otherwise and/or for condonation of delay in filing it, as the case
may be. There is no reason to interpret the stated proviso in any
G other manner lest, inevitably, it would result in re-writing the
same and entail in doing violence to the legislative intent.
Presumably, Supreme Court in M/s. Innovatives Systems, and other
decisions rendered following the same, therefore, was persuaded
to allow the appeal preferred by the assessee and to relegate the
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 97
TELANGANA & ORS.
parties before the Appellate Authority for consideration of the A
appeal for admission on merits. Concededly, Supreme Court was
conscious of the decision in Ankamma Trading Company. In that,
the judgment under challenge before it in the concerned appeal
was founded on the view already taken by the coordinate bench
of the same High Court [including in Ankamma Trading
B
Company]. It has been so recorded by Supreme Court. In that
sense, the legal position expounded in Ankamma Trading
Company, stood impliedly overruled, even though that decision
has not been adverted to or expressly overruled by Supreme
Court. Indeed, the decision of Supreme Court in M/s. Innovatives
Systems, is a brief judgment. That, however, would make no C
difference. For, it is well established that once a special leave
petition has been granted, the doors for the exercise of appellate
jurisdiction of this Court have been let open. Resultantly, the
order impugned before the Supreme Court became an order
appealed against and any order passed thereafter would be an
D
appellate order and attract the doctrine of merger despite the
fact that the order is of reversal or of modification or of affirming
the order appealed against and including is a speaking or
non-speaking one. This legal position has been restated in
Kunhayammed. The argument of the respondent-State that the
decision of Supreme Court in M/s. Innovatives Systems, and other E
decisions following the same, cannot be considered as binding
precedent is rejected. [Paras 8-11] [109-G-H; 110-A-H;
111-A-G]
1.2 The first proviso pertaining to maximum period of
delay to be condoned by the Appellate Authority, also uses the F
expression “admit the appeal”. That expression “admit”,
however, must be read to mean filing, institution or presentation
of the appeal in the office of the Appellate Authority. Whereas,
the expression “admitted” used in the second proviso will have
to be construed as analogous to expression “entertained”. The
setting in which the provisions under consideration appear leaves G
no manner of doubt that it is ascribable to the event of taking up
the appeal for consideration, for the first time, to admit it on merits
or otherwise and/or for condonation of delay in filing the appeal,
as the case may be. Before that event occurs, it is open to the
H
98 SUPREME COURT REPORTS [2019] 9 S.C.R.
A appellant to deposit the tax dues in respect of which the appeal is
preferred and produce proof of such deposit before the
Appellate Authority. This view is reinforced from the exposition
of Supreme Court in Ranjit Impex, wherein the view taken by the
Division Bench of the High Court of Madras that the proof of
deposit of tax has to be produced at the time when the appeal is
B
taken up for consideration, but not at the time of filing or
presentation of the appeal, has been upheld. Even the decision
of this Court in M/s. Lakshmi Rattan Engineering Works Ltd.,
heavily relied upon by the respondent-State, does not militate
against the view taken by us - that the true purport of the said
C proviso is that the Appellate Authority shall proceed with the
consideration of appeal for admission for hearing on merits or
otherwise and/or for condonation of delay in filing appeal, as the
case may be, if the proof of payment of the specified tax dues
referred to in the said proviso is produced by the appellant on
the first date of such consideration of the appeal. [Paras 12-14]
D
[112-A-F]
1.3 In the appeals under consideration, admittedly, the
appellant-assessee had deposited the specified tax dues before
the date on which appeal preferred by them was taken up for
consideration for the first time for admission on merits. In such a
E situation, the stated proviso becomes unavailable to reject the
appeal on the ground of institutional defect. In this view of the
matter, all these appeals must succeed. Taking advantage of the
interpretation given, it is possible that some unscrupulous
litigant (assessee) may file an appeal within the limitation period
F but keep it under defect so that the same does not proceed for
consideration before the Appellate Authority. To obviate such a
mischief, it is directed that the Appellate Authority shall be obliged
to take up every singular appeal for consideration for admission
on merits and/or for condonation of delay in filing the appeal for
the first time, no later than thirty days from the date of its filing,
G institution or presentation in the office of the Appellate
Authority. This direction shall be complied with by all concerned
meticulously, without any exception. That is the only way to
secure the interests of the Revenue and at the same time to
effectuate the purpose underlying the proviso regarding the
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 99
TELANGANA & ORS.
deposit of specified amount of tax dues. Resultantly, the impugned A
judgment of the High Court is set aside and instead the writ
petition(s) are allowed by setting aside the order passed by the
Appellate Authority, rejecting the concerned appeals on the
ground of non-compliance of the stated proviso of the provisions
under consideration. The concerned appeals shall stand restored
B
to the file of the Appellate Authority. The same shall proceed for
consideration in accordance with law. [Paras 16-18] [113-C-H;
114-A]
Civil Appeal Nos.4098/2016 & 4099/2016
1.4 In this set of appeals, admittedly, the appellant-assessee C
deposited the amount after the appeal filed by them came to be
rejected by the Appellate Authority. In that sense, the appellant-
assessee failed to produce proof of payment of tax dues in respect
of which the appeal was preferred before the Appellate Authority
when their appeal was taken up for consideration for admission.
Resultantly, the deposit made after rejection of the appeal will be D
of no avail to the appellant-assessee, in light of the mandate of
the stated proviso under consideration. In view of the above,
these appeals are dismissed. [Paras 19, 20] [114-B-D]
Civil Appeal No.8452/2016
E
1.5 If the appeal filed by the respondent is still pending
and has not been taken up for consideration so far by the Appellate
Authority, only then it would be open to the respondent to deposit
the requisite amount and produce the proof of such deposit before
the Appellate Authority. If, however, the appeal has already been
taken up for consideration for being admitted on merits or F
otherwise and by that date the respondent had not deposited the
requisite amount as prescribed in terms of stated proviso, the
Appellate Authority would be well within its jurisdiction and rather
duty bound to reject the appeal on the ground of an institutional
defect. That is a matter to be considered by the Appellate G
Authority. [Para 23] [115-C-E]
Civil Appeal No. 5343 of 2019
1.6 The impugned judgment is set aside and the parties
are relegated before the High Court for reconsideration of the
H
100 SUPREME COURT REPORTS [2019] 9 S.C.R.
A Writ Petition No.837/2014 afresh on its own merits in accordance
with law and including in light of decision of this Court in Civil
Appeal No.7574/2014 decided today. All contentions available to
both sides in the remanded writ petition are left open to be
considered on its own merits and in accordance with law.
[Para 33] [119-A-B]
B
Civil Appeal No.10670/16
1.7 The parties are relegated before the High Court to
consider the same on its own merits, in accordance with law. All
questions and contentions, available to both sides, are left open
C to be decided by the High Court on its own merits. The impugned
judgment of the High Court is set aside. [Paras 38, 39]
[121-D-E]
Civil Appeal No.3349/2018
1.8 In the present appeal, the appellant cannot be heard to
D agitate the question already decided in Civil Appeal No.7574/
2014 as nothing has been brought to notice to show that the
appellant had deposited the specified tax dues, in respect of which
the appeal was filed, before the first date of consideration of the
appeal by the Appellate Authority. However, as the High Court
E has dealt with merits of the challenge to the original order, in
exercise of writ jurisdiction and as no argument was advanced by
either party in that regard, this appeal is delinked and directed
that it be heard separately on the challenge to the original order
passed by the first Appellate Authority. Appeal to proceed
accordingly. [Paras 40, 41] [121-H; 122-A-B]
F
Ankamma Trading Company v. Appellate Deputy Com-
missioner (CT), Guntur & Anr. (2011) 44 VST 189 (AP);
M/s. IOT Infrastructure & Energy Services Ltd., Rep.
by its Deputy Manager (Accounts) v. State of Andhra
Pradesh Rep. by its Principal Secretary to Government
G (Judgment of Supreme Court dated 14.12.2016 in
Civil Appeal No.12077/2016); M/s. Ranisati Trading
Co. Rep. by its Managing Partner v. Commercial Tax
Officer, Gajuwaka Circle, Visakhapatnam and Ors.
(Judgment of Supreme Court dated 17.04.2017 in
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 101
TELANGANA & ORS.
Civil Appeal No.5339/2017); M/s. Lakshmi Rattan A
Engineering Works Ltd. v. Asst. Commr. Sales Tax,
Kanpur & Anr. [1968] 1 SCR 505 ; Narayan Chandra
Ghosh v. UCO Bank and Ors (2011) 4 SCC 548 :
[2011] 3 SCR 1024 – referred to.
M/s. Innovatives Systems, Rep. by its Managing B
Partner v. State of Andhra Pradesh, Rep. by Principal
Secretary to Government (Judgment of Supreme Court
dated 23.02.2015 in Civil Appeal No.2230/2015) ;
Kunhayammed and Ors. v. State of Kerala and Anr.
(2000) 6 SCC 359 : [2000] 1 Suppl. SCR 538;
Ranjit Impex v. Appellate Deputy Commissioner and Anr. C
(2013) 10 SCC 655 – relied on.
Case Law Reference
(2011) 44 VST 189 (AP) referred to Para 3
[2000] 1 Suppl. SCR 538 relied on Para 3 D
(2013) 10 SCC 655 relied on Para 4
[1968] 1 SCR 505 referred to Para 6
[2011] 3 SCR 1024 referred to Para 6
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7574 E
of 2014
From the Judgment and Order dated 17.09.2013 of the High Court
of Judicature of Andhra Pradesh at Hyderabad in Writ Petition
No. 15384 of 2013
F
With
Civil Appeal Nos.10433 of 2014, 2084 of 2015, 4098, 4099, 8452,
10670 of 2016, 3349 of 2018, 5343 and 5345 of 2019.
B. Adinarayana Rao, Sr. Adv., Dr. M. V. K. Moorthy, R. Ayyam
Perumal, Hitendra Nath Rath, Yogesh Raavi, Vishnu Shankar Jain, G
Ms. Surekha Raman, Purushottam Kumar Jha, Akhil A. Roy, Sahil Singh,
M/s. K J John And Co, Ms. Prerna Singh, Guntur Prabhakar, Prashant
Mathur, Ms. Shoba Ramamuoorthy, Sri Ram J. Thalapathy, Shilp Vinod,
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102 SUPREME COURT REPORTS [2019] 9 S.C.R.
A Pushkin Rajkumar, P. Venkat Reddy, Prashant Tyagi, M/s. Venkat Palwai
Law Associates, S. Udaya Kumar Sagar, Naresh Kumar, D. Mahesh
Babu, Advs. for the parties.
The Judgment of the Court was delivered by
A.M. KHANWILKAR, J.
B
Civil Appeal Nos.7574/2014, 10433/2014, 2084/2015 and
Civil Appeal No.5345 of 2019
(Arising out of S.L.P. (C) No.6880 of 2019)
1. Leave granted in SLP (C) No.6880 of 2019.
C 2. These Civil Appeals emanate from the orders passed by the
Appellate Authority rejecting the appeal preferred by the concerned
appellant(s) under the provisions of APGST Act, 1957 or AP VAT Act,
2005 or Telangana State VAT Act, 2005, as the case may be, on the
ground that the appellant-assessee had failed to comply with the
pre-condition of producing proof of payment of tax admitted to be due or
D of such installments as may have been granted and/or the proof of
payment of twelve and a half percent (12.5%) of the difference of the
tax assessed by the assessing authority and the tax admitted by the
appellant for the relevant assessment year in respect of which the
appeal has been preferred by the concerned appellant-assessee,
E warranting rejection of the appeal in terms of the second proviso of
Section 19 and proviso of Section 21 (2) of the APGST Act, 1957 or
second proviso of Section 31 and proviso of Section 33 (2) of the AP
VAT Act, 2005. Similar position obtains regarding the provisions of
Telangana State enactments.
F 3. The High Court dismissed the writ petitions filed by the
concerned appellant following the decision of the coordinate bench of
the High Court in Ankamma Trading Company Vs. Appellate Deputy
Commissioner (CT), Guntur & Anr.1 and other decisions taking the
same view, despite the appellant pointing out to the High Court that the
decision in Ankamma Trading Company (supra) has been impliedly
G overruled by the Supreme Court in M/s. Innovatives Systems, Rep. by
its Managing Partner Vs. State of Andhra Pradesh, Rep. by
Principal Secretary to Government2. In that case, this Court after
1
(2011) 44 VST 189 (AP)
2
Civil Appeal No.2230/2015 (arising out of SLP (C) No.1832/2015 decided on February
H 23, 2015).
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 103
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
clearly noting that the High Court had relied upon the judgment and A
order passed by the Division Bench of the same High Court [in
Ankamma Trading Company (supra)] to dismiss the writ petition pre-
ferred by the appellant, yet proceeded to allow the appeal filed by the
appellant therein by setting aside the decision of the High Court. The
appellant in that case had filed appeal within limitation period but
B
deposited the twelve and a half percent (12.5%) of the difference of the
tax assessed by the assessing authority in respect of which the appeal
was preferred after the expiry of the limitation period specified in the
first proviso of the concerned provision. This Court, nevertheless, held
that the appellant having deposited the stipulated amount of twelve and
a half percent (12.5%) as directed by the Appellate Deputy C
Commissioner (CT), the High Court ought to have condoned the delay
in complying with the direction given by the Appellate Authority in that
regard and thus restored the appeal with a direction to the Appellate
Authority to decide the appeal on merits. Relying on the subsequent
decisions of this Court in M/s. IOT Infrastructure & Energy Services
D
Ltd., Rep. by its Deputy Manager (Accounts) Vs. State of Andhra
Pradesh Rep. by its Principal Secretary to Government3 and M/s.
Ranisati Trading Co. Rep. by its Managing Partner Vs.
Commercial Tax Officer, Gajuwaka Circle, Visakhapatnam and
Ors.4, it is urged by the appellant-assessee that the High Court ought
not to have disregarded those decisions on the specious ground that the E
same cannot be treated as a binding precedent and purportedly having
been passed in exercise of plenary powers under Article 142 of the
Constitution of India. Inasmuch as, looking at the decision in M/s.
Innovatives Systems (supra) of this Court, there is hardly any doubt
that the effect of the said order is to impliedly overrule the principle
F
enunciated by the Division Bench of the High Court in Ankamma
Trading Company (supra) or other decisions following the same. For,
this Court had unmistakably shown inclination to apply its mind to the
merits of the said order before it having granted leave to appeal against
the same albeit it had disposed of the matter by a brief judgment. Thus,
additionally, the doctrine of merger would come into play as exposited in G
Kunhayammed and Ors. Vs. State of Kerala and Anr.5, wherein a
three-Judge Bench of this Court opined that once a special leave
3
(Civil Appeal No.12077/2016 decided on 14.12.2016)
4
(Civil Appeal No.5339/2017 decided on 17.04.2017)
5
(2000) 6 SCC 359
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104 SUPREME COURT REPORTS [2019] 9 S.C.R.
A petition has been granted, the doors of the appellate jurisdiction of this
Court have been let open and any order passed thereafter would be an
appellate order and would attract the applicability of doctrine of merger.
Further, it would not make a difference whether the order is one of
reversal or of modification or of dismissal, or of affirming the order
appealed against. It would also not make any difference if the order is a
B
speaking or a non-speaking one.
4. In addition, the appellant(s)-assessee(s) have relied on the
decisions of this Court in Ranjit Impex Vs. Appellate Deputy
Commissioner and Anr.6,which has had an occasion to deal with more
C or less similar provision, if not identically worded, being Section 51 of the
Tamil Nadu VAT Act, 2006. Even there the provision contained
stipulation such as the proviso of the provisions under consideration
pertaining to State of Andhra Pradesh and State of Telangana. It is then
urged that even the Division Bench of the High Court in the case of
Ankamma Trading Company (supra), in paragraph 25 has taken note
D of the fact that the proviso of the concerned section does not
specifically mention the time within which such proof of payment is to
be produced but then went on to rely on the first proviso dealing with the
period of limitation within which the appeal is required to be filed and the
maximum period of delay which could be condoned by the Appellate
E Authority, to hold that the deposit specified in the second proviso should
also be paid within such time only. Else, it went on to hold that the
Appellate Authority is obliged to reject the appeal or in other words, not
admit the same.
5. The appellants would urge that there is well recognized
F distinction between the factum of filing, institution and presentation of
the appeal and the factum of “entertaining” the appeal or consideration
thereof for admitting the same on merits. If the provision had expressly
stated that the “appeal when filed” should be “accompanied with” the
receipt or proof of payment of amount referred to in the second proviso,
the interpretation commended to the High Court could be sustained.
G
However, the High Court itself having recognized the fact that no
specific mention is made about the time within which such proof of
payment is to be produced, the corollary thereof is that the proof of
6
(2013) 10 SCC 655
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 105
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
payment is required to be produced by the assessee on the “first date of A
hearing” of the appeal for admission or consideration thereof on merits.
The appellant has also relied on couple of reported decisions to contend
that the right of appeal, though, it does not inhere in the party, but once
such remedy is provided then it cannot be whittled down by giving strict
interpretation to the second proviso. However, the just approach would
B
be to read the expression “not to be admitted” as “not to be entertained”
- if the dealer failed to produce proof of payment of tax dues as per the
second proviso of the concerned provision. The thrust of the argument
is that in cases where the appellant-assessee has already paid the
requisite amount referred to in the second proviso of the concerned
provision, before the appeal is taken by the Appellate Authority/Court C
for the “first time for consideration” after its filing in the office of the
Appellate Authority, that will be substantial compliance of the second
proviso. In such a case, the Appellate Authority would be obliged to
admit the appeal if it deserves consideration on merits and the appellant-
assessee cannot be non-suited on the ground that the amount so paid is
D
after the limitation period specified for filing of an appeal.
6. The respondent-State, on the other hand, has supported the
exposition in the case of Ankamma Trading Company (supra), and
would urge that the view taken in the said decision is the only possible
interpretation of the second proviso. In that, if the amount specified in E
the second proviso is not deposited within the period provided for filing
an appeal and including for condonation of delay, such appeal would be
inflicted with institutional defect and will have to be rejected on that
count in light of the mandate contained in the proviso of the concerned
provision. It is urged that the appellants have been ill- advised to invoke
doctrine of merger. According to the respondent-State, on a bare F
perusal of the decision of this Court in M/s. Innovatives Systems
(supra), and the other decisions passed following the same would clearly
indicate that it has been passed in the fact situation of the concerned
case. Notably, this Court has not interpreted the provisions under
consideration or for that matter explicitly overturned the principle G
expounded by the Division Bench in Ankamma Trading Company
(supra). Whereas, a bare reading of the provision makes it amply clear
H
106 SUPREME COURT REPORTS [2019] 9 S.C.R.
A that it is a mandatory provision. Failure to comply with the stipulation in
the second proviso would inevitably denude the Appellate Authority from
entertaining the same or so to speak, admitting the same on merits. Heavy
reliance has been placed on the decision in the case of M/s. Lakshmi
Rattan Engineering Works Ltd. Vs. Asst. Commr. Sales Tax, Kanpur
& Anr.7,wherein this Court was called upon to interpret Section 9 of the
B
relevant enactment. As per that provision, no appeal against an
assessment shall be entertained unless it is accompanied by satisfactory
proof of the payment of the tax amount admitted by the appellant to be
due. The exposition in this decision, according to the respondent-State,
would admit of no other interpretation of the second proviso as is held by
C the Division Bench of the High Court in Ankamma Trading Company
(supra). In that, the Appellate Authority cannot exercise power to admit
the appeal beyond the statutory period and since the pre-deposit is
quintessence, the requirement of pre-deposit within the maximum
period of limitation for filing the appeal including, for condoning the
delay in filing the same, would have bearing on the second proviso of the
D
concerned provision. Reliance is also placed on the decision in Narayan
Chandra Ghosh Vs. UCO Bank and Ors. 8, which has had an
occasion to interpret the purport of Section 18 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002 wherein the Court noted that there is an absolute
E power to entertain an appeal under Section 18 of the Act unless the
condition precedent, as stipulated, is fulfilled. The respondent-State would,
thus, contend that the deposit even if made by the assessee before the
rejection of the appeal (for non-compliance of the pre-condition in terms
of the proviso of the concerned provision), will be of no avail to the
assessee.
F
7. We have heard the learned counsel for the parties. At the
outset, we deem it apposite to reproduce the relevant
provisions of the APGST Act, 1957 and AP VAT Act, 2005.
Almost identical provisions obtain in the Telangana State Acts. Section
G 19 and 21 of the APGST Act, 1957 and Section 31 and 33 of the AP
VAT Act, 2005, read thus:
7
(1968) 1 SCR 505
8
(2011) 4 SCC 548
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 107
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
A
“APGST Act, 1957 A.P. VAT Act, 2005
Section 19. Appeals.-(1) Any 31. Appeal to Appellate authority.-(1)
dealer objecting to any order Any VAT dealer or TOT dealer or any
passed or proceeding recorded by other dealer objecting to any order
any authority under the provisions passed or proceeding recorded by any
of the Act other than an order authority under the provisions of the B
passed or proceeding recorded by Act other than an order passed or
an Additional Commissioner or proceeding recorded by an Additional
Joint Commissioner, or Deputy Commissioner or Joint Commissioner
Commissioner under sub-section or Deputy Commissioner may, within
(4C) of section 14 may within thirty days from the date of which the
thirty days from the date on which order or proceeding was serve on him,
the order or proceeding was appeal to such authority as may be C
served on him, appeal to such prescribed:
authority as may be prescribed:
Provided that the appellate Provided that the appellate authority
authority may within a further may within a further period of thirty
period of thirty days admit the days admit the appeal preferred after a D
appeal preferred after a period of period of thirty days if he is satisfied
thirty days if he is satisfied that that the VAT dealer or TOT dealer or
the dealer had sufficient cause for any other dealer had sufficient cause for
not preferring the appeal within not preferring the appeal within that
that period: period:
E
Provided further that an appeal so Provided further that an appeal so
preferred shall not be admitted preferred shall not be admitted by the
by the appellate authority appellate authority concerned unless the
concerned unless the dealer dealer produces proof of payment of
produces proof of payment of tax admitted to be due, or of such
tax admitted to be due, or of such instalments as have been granted, and F
instalments as have been granted, the proof of payment of twelve and half
and the proof of payment of per cent of the difference of the tax
twelve and half per cent of the assessed by the authority prescribed and
difference of the tax assessed by the tax admitted by the appellant, for
the assessing authority and the tax the relevant tax period, in respect of
admitted by the appellant, for the which the appeal is preferred.
relevant assessment year, in G
respect of which the appeal is
preferred.
H
108 SUPREME COURT REPORTS [2019] 9 S.C.R.
A
21. Appeal to the Appellate 33. Appeal to the Appellate
Tribunal.-(1) Any dealer objecting Tribunal.-(1) Any dealer objecting
to an order passed or proceeding to an order passed or proceeding
recorded- recorded-
B (a) by any prescribed authority on (a) by any authority prescribed, on
appeal under section 19, or appeal under section 31, or
(b) by an Additional (b) by the Additional
Commissioner or Joint Commissioner, or Joint
Commissioner or Deputy Commissioner or Deputy
Commissioner suo motu under Commissioner under section
C sub-section (4C) of section 14 21 or 32 or 38; or
or under sub-section (2) of (c) by any authority following the
section 20, may appeal to the ruling or order passed under
Appellate Tribunal within section 67;
sixty days from the date on May appeal to the Appellate
which the order or proceeding Tribunal within sixty days from
was served on him. the date on which the order or
D
proceeding was served on him.
(2) The Appellate Tribunal may (2) The Appellate Tribunal may
within a further period of sixty within a further period of sixty
days admit the appeal after the days admit the appeal preferred
period of sixty days specified in after the period of sixty days
E
sub-section (1), if it is satisfied specified in sub-section (1), if it is
that the dealer had sufficient cause satisfied that the dealer had
for not preferring the appeal with sufficient cause for not preferring
that period. the appeal within that period:
Provided that no appeal against Provided that no appeal against
F the order passed under section 19 the order passed under section 31
shall be admitted under sub- shall be admitted under sub-
section (1) or sub-section (2), section (1) or sub-section (2) of
unless it is accompanied by this section unless it is
satisfactory proof of the payment accompanied by satisfactory proof
of fifty per cent of the tax as of the payment of fifty per cent of
G ordered by the Appellate Deputy the tax, penalty, interest or any
Commissioner under section19: other amount as ordered by the
appellate authority under section
31.”
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 109
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
A
Provided further that no appeal
against the order passed under sub-
section (2) of section 20 shall be
admitted under sub-section (1) or sub-
section (2), unless it is accompanied B
by satisfactory proof of the payment
of the tax admitted by the appellant to
be due or in such instalments thereof
as might have become payable as the
case may be, and twenty five per cent
of the difference of the tax ordered by C
the revisional authority under sub-
section (2) of section 20 and the tax
admitted by the appellant:
Provided also that the assessing
authority shall refund the said amount
of twelve and half per cent or twenty D
five per cent or fifty per cent of the
difference of tax assessed by the
assessing authority or revisional
authority as the case may be and the
tax admitted and paid by the
E
appellant, with simple interest
calculated at the rate of 18 per cent
per annum if the refund is not made
within 60 days from the date of
receipt of the order passed under
section 19 or section 21. F
(emphasis supplied)
8. These provisions have been interpreted by the Division Bench
of the High Court in the case of Ankamma Trading Company (supra).
We are essentially concerned with the second proviso of Section 19 and
Section 31 of the respective enactment; and first proviso of Section G
21(2) and Section 33(2) of the respective enactment. Upon reading the
Section under consideration as a whole, it is evident that the first proviso
in the concerned Section (Section 19 and Section 31, as the case may
be) pertains to limitation period “for filing” of an appeal; and discretion
of the Appellate Authority to condone the delay in filing of such appeal,
H
110 SUPREME COURT REPORTS [2019] 9 S.C.R.
A up to a maximum period specified therein. Indeed, the second proviso is
part of the same Section. However, it is an independent condition and in
one sense, mutually exclusive condition mandating or enjoining the
appellant to produce proof of payment of tax dues in respect of which
the appeal is preferred. That obligation, in our opinion, can be discharged
until the appeal is considered for admission and/or condonation of delay
B
in filing of the appeal, as the case may be, by the Appellate Authority for
the first time. We are inclined to take this view as even the High Court
in Ankamma Trading Company (supra) had justly noted that the said
proviso does not provide for any specific period within which the tax
dues should be paid. Moreover, there is no express stipulation to deposit
C the tax dues in respect of which the appeal is preferred, at the time of its
filing, institution or presentation as such. In the absence of such a clear
stipulation, it must necessarily follow that it is open to the assessee to
file the appeal within the statutory period of limitation provided therefor
and later on, deposit the specified tax dues but before the appeal is taken
up for consideration by the Appellate Authority for the first time – be it
D
for condonation of delay in filing the appeal and/or to admit it on merits
or otherwise. The proof of such payment having been made could be
produced thereat. Failing which, the Appellate Authority will have no
other option but to reject the appeal on that count. The Appellate
Authority has no power to extend the time to deposit the specified tax
E dues.
9. Suffice it to observe that, stricto sensu,the said proviso is not a
provision of pre-deposit at the stage of filing, institution or presentation
of the appeal as such; but is a provision stipulating payment of tax dues
as a pre-requisite or sine qua non for consideration of appeal on merits
F or otherwise and/or for condonation of delay in filing the same, as the
case may be, for the first time. If we may say so, it is also to impose
fetter on the Appellate Authority from admitting the appeal for
consideration on merits. It is well recognized that filing, institution or
presentation of appeal in the office of the Appellate Authority is an
independent event than the appeal being taken up for consideration “for
G the first time” for being admitted on merits or otherwise and/or for
condonation of delay in filing it, as the case may be. There is no reason
to interpret the stated proviso in any other manner lest, inevitably, it
would result in re-writing the same and entail in doing violence to the
legislative intent. Presumably, this Court in M/s. Innovatives Systems
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 111
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
(supra), and other decisions rendered following the same, therefore, was A
persuaded to allow the appeal preferred by the assessee and to relegate
the parties before the Appellate Authority for consideration of the
appeal for admission on merits.
10. Concededly, this Court was conscious of the decision in
Ankamma Trading Company (supra). In that, the judgment under B
challenge before it in the concerned appeal was founded on the view
already taken by the coordinate bench of the same High Court
[including in Ankamma Trading Company (supra)]. It has been so
recorded by this Court. In that sense, the legal position expounded in
Ankamma Trading Company (supra), stood impliedly overruled, even
though that decision has not been adverted to or expressly overruled by C
this Court.
11. The argument of the respondent proceeds that the decision in
M/s. Innovatives Systems (supra), neither refers to any specific
provision nor has it expressly over turned the decision of the Division
Bench of the High Court in Ankamma Trading Company (supra). D
Thus, it cannot be considered as a binding precedent. We are not
impressed by this submission. Indeed, the decision of this Court in M/s.
Innovatives Systems (supra), is a brief judgment. That, however, would
make no difference. For, it is well established that once a special leave
petition has been granted, the doors for the exercise of appellate E
jurisdiction of this Court have been let open. Resultantly, the order
impugned before the Supreme Court became an order appealed against
and any order passed thereafter would be an appellate order and attract
the doctrine of merger despite the fact that the order is of reversal or of
modification or of affirming the order appealed against and including is a
speaking or non-speaking one. This legal position has been restated in F
Kunhayammed (supra). Having said this, we must reject the argument
of the respondent-State that the decision of this Court in M/s. Innovatives
Systems (supra), and other decisions following the same, cannot be
considered as binding precedent.
12. In addition, the appellant-assessee has rightly placed reliance G
on the decision of this Court in Ranjit Impex (supra). In that case, the
Court considered almost similar stipulation in Section 51 of the Tamil
Nadu VAT Act, 2006. Indeed, the second proviso therein uses the
expression no appeal shall be “entertained”, unlike the expression used
H
112 SUPREME COURT REPORTS [2019] 9 S.C.R.
A in the provisions under consideration that the appeal so preferred “shall
not be admitted”. We are conscious of the fact that the first proviso
pertaining to maximum period of delay to be condoned by the Appellate
Authority, also uses the expression “admit the appeal”. That expression
“admit”, however, must be read to mean filing, institution or presentation
of the appeal in the office of the Appellate Authority. Whereas, the
B
expression “admitted” used in the second proviso will have to be
construed as analogous to expression “entertained”. We are inclined to
take this view as the setting in which the provisions under consideration
appear leaves no manner of doubt that it is ascribable to the event of
taking up the appeal for consideration, for the first time, to admit it on
C merits or otherwise and/or for condonation of delay in filing the appeal,
as the case may be. Before that event occurs, it is open to the appellant
to deposit the tax dues in respect of which the appeal is preferred and
produce proof of such deposit before the Appellate Authority.
13. This view is reinforced from the exposition of this Court in
D Ranjit Impex (supra), wherein the view taken by the Division Bench of
the High Court of Madras that the proof of deposit of tax has to be
produced at the time when the appeal is taken up for consideration, but
not at the time of filing or presentation of the appeal, has been upheld.
14. Even the decision of this Court in M/s. Lakshmi Rattan
E Engineering Works Ltd. (supra), heavily relied upon by the
respondent-State, does not militate against the view taken by us - that
the true purport of the said proviso is that the Appellate Authority shall
proceed with the consideration of appeal for admission for hearing on
merits or otherwise and/or for condonation of delay in filing appeal, as
the case may be, if the proof of payment of the specified tax dues
F referred to in the said proviso is produced by the appellant on the first
date of such consideration of the appeal. Similarly, the case of Narayan
Chandra Ghosh (supra), will be of no avail to the respondent, wherein
the Court opined that there is an absolute bar to “entertain” an appeal
under Section 18 of the Securitisation and Reconstruction of Financial
G Assets and Enforcement of Securities Interest Act, 2002, unless the
conditions and stipulation are fulfilled. Inasmuch as, the second proviso
under consideration does not require payment of tax dues referred to
therein, at the time of filing, institution or presentation of the appeal but
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 113
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
the proof of such payment has been made, is required to be produced A
before the Appellate Authority at the first hearing of the appeal; failing
which the Appellate Authority would be well within its jurisdiction to
reject it rather duty bound not to proceed with the appeal on merits and
to reject the same at the threshold on the ground of an institutional
defect.
B
15. For the view that we have taken, it is wholly unnecessary to
deal with the other reported decisions relied upon by the parties or to
deal with other arguments which have no bearing on the conclusion
reached by us.
16. Reverting to the factual position in the appeals under C
consideration, admittedly, the appellant-assessee had deposited the
specified tax dues before the date on which appeal preferred by them
was taken up for consideration for the first time for admission on merits.
In such a situation, the stated proviso becomes unavailable to reject the
appeal on the ground of institutional defect. In this view of the matter, all
these appeals must succeed. D
17. While parting, we may observe that taking advantage of the
interpretation given by us, it is possible that some unscrupulous litigant
(assessee) may file an appeal within the limitation period but keep it
under defect so that the same does not proceed for consideration before
the Appellate Authority. To obviate such a mischief, we hold and direct E
that the Appellate Authority shall be obliged to take up every singular
appeal for consideration for admission on merits and/or for condonation
of delay in filing the appeal for the first time, no later than thirty days
from the date of its filing, institution or presentation in the office of the
Appellate Authority. This direction shall be complied with by all con- F
cerned meticulously, without any exception. That is the only way to se-
cure the interests of the Revenue and at the same time to effectuate the
purpose underlying the proviso regarding the deposit of specified amount
of tax dues.
18. Resultantly, the impugned judgment of the High Court is set G
aside and instead the writ petition(s) are allowed by setting aside the
order passed by the Appellate Authority, rejecting the concerned
appeals on the ground of non-compliance of the stated proviso of the
H
114 SUPREME COURT REPORTS [2019] 9 S.C.R.
A provisions under consideration. The concerned appeals shall stand
restored to the file of the Appellate Authority. The same shall proceed
for consideration in accordance with law. All pending applications are
also disposed of. No order as to costs.
Civil Appeal Nos.4098/2016 & 4099/2016
B 19. These appeals were heard analogously with Civil Appeal
No.7574/2014. In this set of appeals, admittedly, the appellant-assessee
deposited the amount after the appeal filed by them came to be rejected
by the Appellate Authority. In that sense, the appellant-assessee failed
to produce proof of payment of tax dues in respect of which the appeal
C was preferred before the Appellate Authority when their appeal was
taken up for consideration for admission. In Civil Appeal No.7574/2014,
we have held that it is open to the assessee to deposit the amount before
the event of first date of hearing of the appeal for admission and/or for
condonation of delay in filing the appeal. Resultantly, the deposit made
after rejection of the appeal will be of no avail to the appellant-assessee,
D in light of the mandate of the stated proviso under consideration.
20. In view of the above, these appeals must fail and the same
are therefore, dismissed. All pending applications are also disposed of.
No order as to costs.
E Civil Appeal No.8452/2016
21. This appeal was analogously heard along with Civil Appeal
No.7574/2014. In the present appeal, the State has challenged the
judgment and order passed by the High Court in Writ Petition No.22337
of 2015 and, in particular, the liberty granted to the respondent (writ
F petitioner) to pay the requisite amount after expiry of the limitation
period prescribed under Section 33 of AP VAT Act, 2005 and on such
deposit being made, the Appellate Authority is directed to consider the
appeal on merits.
22. The background in which such direction came to be issued,
can be discerned from the appeal filed by the State. To wit, the
G
respondent, who was dealing in works contracts and was registered
under APGST Act, 1957, was assessed by the appropriate authority but
that assessment was revised by the Commercial Tax Officer by passing
a revision order dated 25 th March, 2013. Against that decision,
respondent-assessee preferred appeal before the State Sales Tax
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 115
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
Appellate Tribunal. During the pendency of the said appeal, respondent A
filed a writ petition to challenge the orders passed by the Commercial
Tax Officer dated 27th February, 2013 and 25th March, 2013. That writ
petition has been disposed of by the High Court vide impugned
judgment, with liberty to comply with the condition of paying the tax
dues in terms of the second proviso of the concerned provision within a
B
period of six weeks from the date of receipt of the copy of order and
upon such compliance, the Appellate Authority would decide the
pending appeal on merits.
23. Having regard to the exposition in Civil Appeal No.7574 of
2014, decided today, it must follow that if the appeal filed by the
respondent is still pending and has not been taken up for consideration C
so far by the Appellate Authority, only then it would be open to the
respondent to deposit the requisite amount and produce the proof of
such deposit before the Appellate Authority. If, however, the appeal has
already been taken up for consideration for being admitted on merits or
otherwise and by that date the respondent had not deposited the D
requisite amount as prescribed in terms of stated proviso, the Appellate
Authority would be well within its jurisdiction and rather duty bound to
reject the appeal on the ground of an institutional defect. That is a
matter to be considered by the Appellate Authority. Besides this
observation, nothing more is required to be stated in this appeal filed by
the State. E
24. We dispose of the appeal in the aforementioned terms with no
order as to costs. All pending applications are also disposed of.
Civil Appeal No.5343 of 2019
(Arising out of SLP (C) No.19961/2015) F
25. Leave granted.
26. This appeal takes exception to the judgment and order dated
31st October, 2014 passed by the High Court of Judicature at Hyderabad
for the State of Telangana and the State of Andhra Pradesh in Writ
G
Petition No.837 of 2014, whereby the writ petition filed by the assessee
challenging the order passed by the second respondent-Appellate
Authority dated 31st December, 2013 came to be rejected. The appeal
was dismissed on the sole ground that the appellant had failed to pay the
H
116 SUPREME COURT REPORTS [2019] 9 S.C.R.
A required twelve and a half percent (12.5%) disputed tax in terms of
Section 31 of AP VAT Act, 2005. Initially, the Commercial Tax Officer
passed an assessment order on 11th June, 2012. The appellant filed
appeal against the said assessment order on 11th July, 2012. The
appellant was called upon by the Appellate Authority vide
communication dated 12th July, 2012 to make good the short payment of
B
pre-deposit in the sum of Rs.1,35,00,512/- as also the institution fee. The
appellant filed response to the said communication contending that there
was nput tax credit to the account of the appellant in the sum of
Rs.1080,01,63,420/- and that amount would arise only in respect of the
tax paid on taxable purchases effected within the State. Despite that
C factual aspect brought to the notice of the first Appellate Authority, it
rejected the appeal for non-payment of pre-deposit amount vide order
dated 24th July, 2012. This was an ex-parte order.
27. The appellant then filed representation to the assessing
authority for issuing tax credit certificate for giving necessary
D adjustments against the taxes payable for 04/2010 to 06/2011 and
pointing out the order of the Tribunal dated 18th October, 2011 which
was communicated long back but not implemented thus far. The
appellant, therefore, submitted new representation to the assessing
authority on 15 th September, 2012. The Commercial Tax Officer
eventually, issued a certificate on 12th October, 2012 certifying that the
E appellant has input tax credit of Rs. 92,01,606/-, eligible to be refunded
either in cash or adjusted. On 13th October, 2012, the Commercial Tax
Officer issued proceedings holding that the appellant has an excess tax
credit of Rs.66,46,284/- for adjustment or refund.
28. The appellant being aggrieved by the orders passed by the
F Appellate Deputy Commissioner rejecting appeal on 24th July, 2012 on
the ground of non-payment of requisite disputed tax amount, filed
second appeal before the Sales Tax Appellate Tribunal. That came to be
allowed by setting aside the order rejecting the first appeal and instead
directing the first Appellate Authority to restore the appeal and hear the
G appellant, as the order dated 24th July, 2012 was an ex parte order passed
without hearing the appellant.
29. In remanded proceedings, appellant filed evidence before the
first Appellate Authority on 21st July, 2013 and requested to consider the
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 117
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
evidence and give adjustment of the excess payment due to the A
appellant as certified by the assessing authority. Thus, the appellant
requested the Appellate Authority to accept the tax credit certificates
and take the appeal onfile for disposal on merits. Despite production of
the said certificates, the Appellate Deputy Commissioner once again
called upon the appellant to pay the balance amount towards pre-
B
deposit, vide communication dated 15th May, 2013. In response thereto,
the appellant filed representation reiterating its earlier stand.
Nevertheless, the Appellate Deputy Commissioner once again rejected
the appeal on 31st December, 2013, for non-payment of pre-deposit
amount primarily relying upon the judgment of Ankamma Trading
Company (supra). Eventually, the appellant challenged the C
aforementioned decision by filing writ petition No.847 of 2013. That writ
petition has been dismissed by the High Court on the basis of the
exposition in Ankamma Trading Company (supra).
30. The principal grievance of the appellant is that after remand,
the first Appellate Authority failed to consider the specific stand taken D
by the appellant that it was entitled to adjustment of the amount
mentioned in the tax credit certificate and if so done the appellant had
complied with the pre-condition of deposit of twelve and a half percent
(12.5%) of the amount in respect of which the appeal was filed by the
appellant before the first Appellate Authority. Although, this plea was
specifically taken before the Appellate Authority, the judgment of the E
Appellate Authority has not analysed the same at all. Instead, it
proceeded to dismiss the appeal merely by relying on the exposition in
Ankamma Trading Company (supra). Similarly, even the High Court
after recording this argument of the learned counsel for the appellant,
has not analysed the same and mechanically rejected the writ petition on F
the ground that appellant had failed to comply with the pre-condition of
deposit. This approach of the High Court as well as of the first Appellate
Authority is the subject matter of assail in the present appeal.
31. We have heard the counsel for the parties. As regards the
legal position expounded in Ankamma Trading Company (supra), we G
have already answered the same in Civil Appeal No.7574/2014 decided
today. That appeal was heard along with all connected matters. In the
present case, however, the additional point which arises is whether the
appellant was entitled for adjustment of the amount mentioned in the tax
H
118 SUPREME COURT REPORTS [2019] 9 S.C.R.
A credit certificate issued in favour of the appellant. Admittedly, the
appellant had specifically taken that plea before the first Appellate
Authority. However, as already mentioned hitherto the first Appellate
Authority failed to analyse that aspect - which it was expected to do, in
terms of the earlier order passed by the second Appellate Authority and
even otherwise. Further, this grievance was specifically made before
B
the High Court in the writ petition filed by the appellant as is noticed
from the impugned judgment, the relevant portion of the judgment
recording the argument of the appellant, reads thus:
“………
C Aggrieved thereby, the present Writ Petition is filed. Sri Tejprakash
Toshniwal, Learned Counsel for the petitioner, would submit that
in M/s. Ideal Detonators Pvt. Ltd. v. Commercial Tax Officer,
the Supreme Court had directed the Appellate Deputy
Commissioner to revive the earlier order and dispose of the same
on merits, after due notice to the parties; in Fytochem
D Formulations Ltd. v. Commercial Tax Officer, a Division Bench
of this Court had held that it is incumbent on the Commercial Tax
Officer to decide the representation submitted by the petitioner;
and, in case the petitioner is entitled to the excess amount, then a
certificate/endorsement should be issued to him, so that the amount
E can be adjusted towards pre-deposit of 12.5% at the time of ad-
mission of the appeal; the Commercial Tax Officer was directed
to decide the representation; and, in case the petitioner’s
representation was accepted by the Commercial Tax Officer, the
2 nd respondent was directed to admit the appeal. Learned
Counsel would also rely on Chander Prakash Goyal v. State of
F Haryana, in this regard……………..”
32. However, even the High Court has not answered this specific
plea urged by the appellant, in the impugned judgment. If the appellant is
right in contending that the appellant is entitled for an adjustment of
amount and if so done, there would be no need for the appellant to
G deposit twelve and a half percent (12.5%) amount as required by the
second proviso of Section 31 of the Act. The appellant had relied on the
decisions of this Court to buttress that argument. However, the same
has remained to be analysed and considered even by the High Court.
H
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 119
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
33. In that view of the matter, we deem it appropriate to set aside A
the impugned judgment and relegate the parties before the High Court
for reconsideration of the Writ Petition No.837/2014 afresh on its own
merits in accordance with law and including in light of decision of this
Court in Civil Appeal No.7574/2014 decided today. All contentions
available to both sides in the remanded writ petition are left open to be
B
considered on its own merits and in accordance with law.
34. Accordingly, this appeal is allowed. The impugned judgment
and order passed by the High Court dated 31st October, 2014 in Writ
Petition No.837/2014 is set aside and instead the writ petition is restored
to the file of the High Court for fresh consideration in light of the
observations made hitherto. All contentions available to the parties are C
left open. All pending applications are also disposed of. No order as to
costs.
Civil Appeal No.10670/16
35. This appeal was heard analogously with Civil Appeal No.7574/ D
2014. It has been preferred by the assessee. The respondent No.2 passed
an order dated 24th February, 2015, levying a penalty under Section 53(3)
of the AP VAT Act, 2005 amounting to Rs.67,57,696/-, being equivalent
to 100% of the tax due. The appellant relies on a certificate dated 4th
April, 2015 issued by respondent No.1 and stated on oath that a tax
credit carry forward of Rs.10,63,683/- by end of May, 2014 is available E
to the appellant. In the appeal preferred by the appellant against the
order imposing additional tax and penalty filed on 7th April, 2015, the
appellant specifically took a plea that the input tax credit and alleged
variations between purchase and sales transactions recorded in the books
of account vis-à-vis the returns filed under the AP VAT have been wrongly F
disallowed. Notably, the appellant filed an affidavit stating that a tax
credit of Rs.10,63,683/- is available to the appellant after filing the monthly
return for May, 2014 and that such credit has not been adjusted to any
other tax liability and thus prayed that the said credit may be adjusted
towards the twelve and a half percent (12.5%) of Rs.67,57,696/-, which
comes to Rs.8,44,712/-. Despite this specific stand taken by the G
appellant on affidavit, the respondent No.3 issued notice claiming that
the appeals filed by the appellant were not compliant with Section 31 for
want of proof of payment of twelve and a half percent (12.5%) of the
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120 SUPREME COURT REPORTS [2019] 9 S.C.R.
A disputed tax and penalty. Later on, respondent No.3 rejected the appeal
on 5th June, 2015 on the ground that the appellant had failed to produce
the proof of payment of twelve and a half percent (12.5%) of the
disputed tax and penalty.
36. It is noticed from the narration of facts in the appeal that the
B appellant was then advised to deposit the twelve and a half percent
(12.5%) disputed tax which it did on 30th January, 2016 and 30th March,
2016, in installments. The appellant had also filed writ petition under
Article 226 of the Constitution of India being Writ Petition No.393 of
2015 and assailed the order passed by the Appellate Authority, rejecting
its appeal on the ground of institutional defect due to non-production of
C proof of payment of disputed tax. The High Court relying on Ankamma
Trading Company (supra), rejected the writ petition filed by the
appellant.
37. Being aggrieved, the appellant has preferred this appeal. Upon
perusal of order passed by the Appellate Authority, it is noticed that even
D the Appellate Authority rejected the appeal without taking notice of the
prayer made by the appellant on oath that a tax credit of Rs.10,67,683/-
is available to the appellant and that such credit has not been adjusted
towards any other tax liability and can be adjusted towards the twelve
and a half percent (12.5%) of disputed tax amount of Rs.67,57,696/-,
E which comes to Rs.4,44,712/- only. The order of the Appellate
Authority, as communicated to the appellant, reads thus:
“The appeal petition along with stay petition (main appeal &
penalty appeal) are returned as the same are not in accordance in
terms of second provision to sec.31(1) of read with Rule 38 of the
F AP VAT, 2005 for the reason.
“Provided further that an appeal so preferred shall not be
admitted by the appellate authority concerned unless the dealer
produces proof of payment of tax admitted to be due or of such
instalments as have been granted and the proof of payment of
G 12.5% of the difference of the tax assessed and the tax admitted
by the appellant, for the relevant tax period, in respect of which
the appeal is preferred.”
Further they have not filled the challan for appeal fee in original
and also medical certificate for delay in submission of the appeal.
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M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF 121
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
Hence, in view of the above, the admission of the two appeals A
stand rejected.”
38. Even the High Court has failed to consider this aspect of the
matter. Whereas, if the representation/request made by the appellant is
just and deserved to be accepted, the appellant would be right in
contending that no payment towards the amount specified in the stated B
proviso under consideration was required to be made by the appellant
and for that reason, the appeal preferred by the appellant ought to
proceed for consideration for admission on merits. In that, upon
accepting the representation to adjust the tax credit of Rs.10,63,683/-, a
certificate/endorsement could be issued to the appellant by the
department so that the said amount is adjusted towards payment of C
specified amount of tax dues including twelve and a half percent (12.5%).
There is force in this submission. However, instead of examining this
plea raised by the appellant in this appeal, we deem it proper to relegate
the parties before the High Court to consider the same on its own
merits, in accordance with law. We do not wish to dilate on any other D
contention in this judgment. We leave all questions and contentions,
available to both sides, open to be decided by the High Court on its own
merits.
39. In view of the above, we set aside the impugned judgment of
the High Court and relegate the parties before the High Court by E
restoring the Writ Petition No.31393 of 2015, for fresh consideration
thereof by the High Court on its own merits in accordance with law. All
pending applications are also disposed of. No order as to costs.
Civil Appeal No.3349/2018
40. This appeal was tagged along with the Civil Appeal No.7574/ F
2014 and other connected matters. However, in those cases, the High
Court had rejected the writ petition on the sole ground that the
concerned writ petitioner had failed to comply with the condition of
deposit prescribed in terms of stated proviso of the provision(s) under
consideration. In none of these cases, the High Court considered the G
matter on merits regarding the challenge to the original assessment
order. In the present appeal, the appellant cannot be heard to agitate the
question already decided in Civil Appeal No.7574/2014 as nothing has
been brought to our notice to show that the appellant had deposited the
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122 SUPREME COURT REPORTS [2019] 9 S.C.R.
A specified tax dues, in respect of which the appeal was filed, before the
first date of consideration of the appeal by the Appellate Authority.
41. However, as the High Court has dealt with merits of the
challenge to the original order, in exercise of writ jurisdiction and as no
argument was advanced by either party in that regard, we deem it
B appropriate to delink this appeal and direct that it be heard separately on
the challenge to the original order passed by the first Appellate
Authority. Appeal to proceed accordingly.
Divya Pandey Appeals disposed of.
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