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2021 DIGILAW 855 (GUJ)

ASPEN INETRNATIONAL PVT LTD. v. STATE OF GUJARAT

2021-09-23

RAJENDRA M.SAREEN, SONIA GOKANI

body2021
ORDER : SONIA GOKANI, J. 1. Rule, returnable forthwith. Learned AGP, Mr.Soham Joshi waives service of notice of Rule for and on behalf of the respondent-State. 2. By way of the present petition under Article 226 of the Constitution of India the petitioner prays for quashing and setting aside the order dated 11.02.2021 passed by the Gujarat Value Added Tax Tribunal (‘the VAT Tribunal’ hereinafter) in Second Appeal No.35 of 2020 in the following factual background: 1.1 The petitioner is a private limited company engaged in the business of trading in petrochemicals, which is registered under the VAT Act, 2003 as well as Central Sales Tax Act, 1956. The petitioner enters into the high seas sale agreement with buyers and pursuant to such agreements, the bills of lading are endorsed in favour of the buyers. Such transactions being sales by transfer of document of title to the goods before crossing of customs frontiers qualify as sales in the course of import under Section 5(2) of the CST Act. The petitioner did not pay tax on such transactions and claimed the transactions to be sales in the course of import in the return filed under the VAT Act and CST Act. 1.2 The Assessing Officer allowed the exemption for high seas sale transaction in respect of which documents had already been submitted while the exemption in respect of which documents were pending had been rejected. The huge demand of tax was raised in assessment under the CST Act. 1.3 The petitioner has preferred the First Appeal challenging the Assessment Order before the Appellate Authority. The issue since was for verification of the documents, which could not be produced, the Joint Commissioner called for the report from the Assessing Officer vide its communication dated 30.08.2018. The representative authority produced a file of documents, according to the Assessing Officer, they were not relevant. The petitioner also made internal verification and found that its employee had erroneously submitted wrong set of documents before the Assessing Officer pursuant to the letter of the Joint Commissioner. 1.4 Another letter was addressed to the Assessing Officer to re-verify the documents. The assessment was completed and then the petitioner approached the Appellate Authority for re-verification because of the denial by the Assessing Authority, the Appellate Authority summarily dismissed the First Appeal on the ground of non-payment of pre–deposit. 1.4 Another letter was addressed to the Assessing Officer to re-verify the documents. The assessment was completed and then the petitioner approached the Appellate Authority for re-verification because of the denial by the Assessing Authority, the Appellate Authority summarily dismissed the First Appeal on the ground of non-payment of pre–deposit. 1.5 The petitioner preferred Second Appeal before the VAT Tribunal for admission of Second Appeal and stay against the recovery of dues. Such verification had been directed by the Appellate Authority, which was refused on the ground that the assessment was concluded. 1.6 According to the petitioner, there is a recovery of Rs.45,57,510/- and of Rs.57,228/- on identical issue from the group of company of the petition namely M/s.Sanman Trade Impex Ltd. It is his grievance that 20% of the tax liability is demanded by way of the pre–deposit for admission of the appeal by the order dated 11.02.2021. For other assessment years, he has been able to duly furnish the evidences for the high seas sale transactions, which have also been accepted by the Assessing Officer. For other assessment years, he has been able to duly furnish the evidences for the high seas sale transactions, which have also been accepted by the Assessing Officer. The petitioner, therefore, is before this Court seeking to challenge the impugned order dated 11.02.2021 with the following prayers: “31… (A) This Hon’ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside impugned order dated 11.02.2021 (annexed At Annexure A) passed by the learned Gujarat Value Added Tax Tribunal and the appeal may pleased to ordered to be heard without insistence of any further pre-deposit or security; (B) In the laternative this Hon’ble Court may be pleased to quash and set aside the appeal orders as well as assessment order dated 30.03.2018 and the matter may please be remanded to the assessing authority for fresh assessment after verifying documents to be produced by the Petitioner; (C) Pending notice, admission and final hearing of this petition, this Hon’ble Court may be pleased to restrain the learned Respondent from making coercive recovery in relation to the subject matter of the petition and the learned Tribunal may also be restrained from proceeding further in the matter; (D) Ex parte ad interim relief in terms of prayer C may kindly be granted; (E) Such further relief(s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioners shall forever pray.” 3. We have heard both the sides and taken up the matter for final hearing, at the admission stage with the joint request. Our attention is drawn to the various documentary evidences which have been furnished on record and also the order which is impugned. 4. Learned advocate, Mr.Uchit Sheth has also relied on the decision of this Court rendered in case of GYSCOAL ALLOYS LTD. VS. STATE OF GUJARAT passed in SPECIAL CIVIL APPLICATION NO.14977 OF 2019 to urge that the amount of pre-deposit is to corelate with the amount of tax demand and not with the amount of turnover of the assessee. 5. Learned AGP, Mr.Soham Joshi has urged that in the matter of pre-deposit interference is not desirable. It is a discretion of the officer concerned. 5. 5. Learned AGP, Mr.Soham Joshi has urged that in the matter of pre-deposit interference is not desirable. It is a discretion of the officer concerned. 5. Having heard the learned advocates on both the sides and also having noticed the material on the record, we could notice that the demand of the pre-deposit is to the tune of 20% of the tax liability for admission of the appeal vide impugned order dated 11.02.2020. As could be noticed from the pleadings for the other assessment year, the petitioner has been able to duly furnish the evidence for high seas sale transactions, which have been accepted also by the different assessment orders. 6. Considering the justifiable grounds and the bona fide nature of the transaction, we are of the opinion that First Appellate Authority when has already ordered the reverification of the document, which had not been complied with by the Assessing Authority, the VAT Tribunal could have considered this aspect, which instead has ordered the 20% of the pre-deposit. According to us, 5% of the amount by way of the pre-deposit would suffice & the insistence of requirement of pre-deposit of to the tune of 20% would need indulgence. 7. We, accordingly, direct the petitioner to deposit 5% of the amount which shall include the amount of Rs.5,18,935/- within a period of two weeks from the date of receipt of a copy of this order. The First Appellate Authority then shall proceed with the matter in accordance with law and as directed without being influenced by the order passed by this Court. 8. With the above direction, present petition stands disposed of.