M/S 1000 Trees Housing PVT LTD vs. Joint Excise And Taxation Commissioner (Appeals), Gurugram And Others

Facts

The petitioner, M/s 1000 Trees Housing Pvt Ltd, a developer registered under the Haryana Value Added Tax Act, 2003 (HVAT Act), sought a direction from the High Court to entertain its appeal against an order dated 08.04.2024 without insisting on the statutory pre-deposit under Section 33(5) of the HVAT Act. The petitioner had opted for a composition scheme and was assessed for the year 2015-16, resulting in a demand of Rs. 4,50,93,177/-. Their initial appeal was dismissed on 08.04.2024 due to non-compliance with the pre-deposit requirement. The petitioner filed a subsequent appeal before the Haryana VAT Tribunal on 21.08.2025 without the requisite surety, leading to the present writ petition.

Held

The Court held that the argument that the appellate authority and Tribunal should entertain the appeal without insisting on the statutory pre-deposit is devoid of merit. Citing the Supreme Court judgment in M/s Tecnimont Pvt. Ltd. vs. State of Punjab and others, the Court affirmed that states are empowered to enact provisions requiring statutory pre-deposit for entertaining appeals, and such conditions are not onerous, harsh, or violative of Article 14 of the Constitution. The Supreme Court also held that appellate authorities do not have the discretion to grant relief against the requirement of pre-deposit. The Court noted that Section 33(5) of the HVAT Act allows for furnishing a bank guarantee or adequate security. The Court found the petitioner's reliance on judgments like Indu Nissan Oxo Chemicals Ind. Ltd. to be unavailing as those cases require due consideration of individual facts. The Court distinguished the present case from M/s Anand Rathi Commodities International Private Limited and M/s Kelmar (India) Exports, where the courts were satisfied with the petitioners' inability to furnish security or where the petitioners agreed to deposit a partial amount. In the present case, the Court was unable to record satisfaction regarding undue financial hardship and found no merit in the argument that the merits of the case should negate the pre-deposit requirement. Therefore, the writ petition was dismissed.

Key Issues

1. Whether the Haryana VAT Tribunal is empowered to entertain an appeal filed by the petitioner without insisting on the statutory pre-deposit as mandated by Section 33(5) of the HVAT Act, despite the petitioner's claim of financial hardship? The petitioner argued that they are facing severe financial hardship, are unable to deposit the disputed amount, and have not received revenue for nearly seven years. They contended that their financial health is weak, as evidenced by a certificate from a Chartered Accountant, and that they have a strong case on merits, thus should not be left remediless. They relied on Supreme Court and High Court judgments to support their plea for waiver of pre-deposit. The respondents argued that the petitioner's financial health is not as projected. They presented evidence of the petitioner's taxable turnover and tax paid under GST for the years 2024-25 and 2025-26, suggesting the petitioner's averments were false. They sought dismissal of the writ petition.