The Tribunal must consider the prima facie case of the appellant before imposing pre-deposit requirements, as mandated by the VAT Act.

JUDGMENT :

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. This Court by order dated 21.06.2023 has admitted Tax Appeals on the following substantial questions of law:

“19(a) Whether on the facts and in the circumstances of the case the Gujarat Value Added Tax Tribunal is justified in not granting waiver of pre-deposit to the appellant without assigning any reasons for such decision?

(b) Whether on the facts and in the circumstances of the case the Gujarat Value Added Tax Tribunal is justified in not granting waiver of pre-deposit to the appellant even though the entire demand is based upon Section 61 of the VAT Act which is wholly irrelevant to the issue of determination of “sale price”?

(c) Whether on the facts and in the circumstances of the case the Gujarat Value Added Tax Tribunal is justified in not granting waiver of pre-deposit to the appellant even though adjustment of tax liability is clearly permissible under Section 8 of the VAT Act?

(d) Whether on the facts and in the circumstances of the case the Gujarat Value Added Tax Tribunal is justified in not granting waiver of pre-deposit to the appellant even though the appellant has a strong prima facie case squarely supported by decision of Hon’ble Supreme Court in the case of Southern Motors (supra)?”

2. The appellant preferred Second Appeal before the Gujarat Value Added Tax Tribunal, Ahmedabad [for short ‘the Tribunal’] challenging the order of the Deputy Commissioner of State Tax, Appeal- 11, Rajkot, for assessment periods pertaining to 2010-11, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17 whereby, the first appeals were summarily dismissed as the appellant did not pay the pre-deposit.

3. The Tribunal passed common order dated 16.06.2022 in Second Appeal Nos. 373 to 379 of 2020 so far as assessment period 2010-2011, 2011-12 and 2012-13 is concerned. The Tribunal held that in view of the ratio laid down by this Court in case of Kavya Marketing vs. State of Gujarat in Special Civil Application No. 1027 of 2022, the Tribunal was of the opinion that no pre-deposit direction is required for the said period as the assessments were made under section 34(8A) of the Value Added Tax Act, 2003. However, for the remaining years, the Tribunal passed the order for pre-deposit of the amount specified in the common order.

4. As the appellant did not deposit the entire pre-deposit amount for the assessment period from 2013-14 to 2016-17, the Tribunal, by common order dated 18.11.2022, dismissed the appeals for the entire period from 2011-12 to 2016-17 oblivious of the fact that the Tribunal did not pass an order for pre-deposit for the assessment period 2010-11 to 2012-13.

5. Learned advocate Mr. Sheth submitted that admittedly, the Tribunal passed the order at the time of admission for the period from 2010-11 to 2012-13 giving no pre-deposit direction and therefore, Second Appeal No. 373 to 379/2020 for the said period could not have been dismissed for non-compliance of the direction of pre-deposit passed by the Tribunal.

6. On perusal of the order dated 16.06.2022 passed by the Tribunal it is apparent that the Tribunal in para 5 of the said order has categorically observed as under:

“Now to determine reasonable predeposit for the financial years 2013-14, 2014-15, 2015-16 and 2016-17, Ld. G.R. has submitted detail pursis along with ledger account of particular purchaser. After taking consideration submission of Ld. G.R. and necessary documents, it is a fit case for determination of pre-deposit as per section 73 of GVAT Act and as per ratio laid down by the Hon. High Court in the case of Kavya Marketing. Keeping in mind all the facts, discussion and ratio of Hon. High Court, the appellant is directed to deposit Rs.14,00,000/-against the tax demand of Rs.67,23,758/-for the financial year 2013-14, Rs.18,00,000/-against the tax demand of Rs.91,22,027/-for the financial year 2014-15, Rs.28,00,000/- against the tax demand of Rs.1,40,36,979/-for the financial year 2015-16 and Rs.50,00,