Non-compliance with pre-deposit regulations leads to dismissal of tax appeal without examination of substantive issues.

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

1. This Court passed the following order on

2.7.2025:

“Learned advocate Mr. Parth Rachchh submitted that there is no instruction from the appellant and therefore, it is not possible to proceed with the hearing of the matter.

In such circumstances, issue notice to the appellant, returnable on 9th July, 2025.

Direct service today is permitted.”

2. Learned advocate Mr. Parth Rachchh appearing for learned advocate Mr. Paresh Dave for the appellants submitted that Notice was sent through RPAD to the appellants, however, the same is returned unserved.

3. This Court, by order dated 29.4.2009, has admitted the appeal on the following substantial questions of law:

“(a) Whether benefit of Notification No. 2/95CE was available to sales made by a 100% EOU in Domestic Tariff Area (DTA)

against foreign exchange or not?

(b) Whether the action of the Appellate Tribunal in directing predeposit of Rs. 25 lakhs for hearing of Appeal Nos. E/136 & 137/2005 on merit was justified in the facts of this case?

(c) Whether the action of the Appellate Tribunal in rejecting the appeal for noncompliance of condition of predeposit was legal, proper and justified in the facts and circumstances of the case?”

4. It appears that the appellants did not deposit the amount of Rs. 25 Lakh, which was ordered by the Tribunal as a condition of pre-

deposit, by order dated 25.8.2005, which reads as under:

“1. Heard both sides.

2. The appellants have filed the modification application seeking modification of the stay order dated 18.3.2005 whereby they were directed, to deposit a sum of Rs.25 lakhs towards duty and report compliance on 26.5.2005. It is seen that the duty demand involved in the case is (Rs.1,08,91,756 + Rs.40,01,044/-) Rs.1,48,92,800/- and penalty of (Rs.30,00,000/- + 1,48,92,800/-) Rs.1,78,92,800/-.The modification application states that in identical cases the Tribunal has granted an unconditional stay. Therefore, in this case also the unconditional stay should be granted.

3. After perusal of the stay order, we find that the bench recorded a detailed order and taken into consideration the entire facts and circumstances of the case and the legal provisions. The ground taken in the modification application is not a legal binding ground for the simple reason that the dispensation of the pre-deposit in a similar matter cannot have a binding effect on the bench. Each case has to be decided on its own merits. We, therefore, do not find any justification for unconditional stay in the matter. We, therefore, dismiss the modification petition filed by the appellants. We, however, extend the time for pre-deposit upto 30th September, 2005. Compliance is to be reported on 05.10.2005. It is made clear that if the amount is not pro-deposited within the extended time, no further extension will be granted and the appeals will be dismissed without any further notice to the appellants.”

5. It appears that the appellants failed to deposit the amount of pre-deposit, therefore, following order was passed on 31.10.2005:

“Vide Order No.S/280-285/WZB/2005/C.I dtd. 18.3.2005, pre-deposit of Rs.25 lakhs towards duty by M/s. Goyal Synthetics was directed. An application for modification was filed by them which was heard and dismissed by Order No.M/75/WZB/2005/ C.III dtd. 25.8.2005 but time for pre-deposit was extended up to 30/9/2005 and compliance was to be reported on 5.10.2005. Αn application for adjournment was made on 4.10.05 and the matter has been fixed today for compliance report. The Ld.counsel for the applicants seeks further time on the ground that writ petition