Diganta Duarah vs. The Union Of INDIA And 4 Ors.

Facts

The petitioner, M/s Diganta Duarah, a sole proprietor, was assessed to tax under the Assam Value Added Tax Act, 2003 for the financial year 2016-2017. Aggrieved by the Order-in-Original dated 19.12.2023, the petitioner filed an appeal before the Commissioner (Appeals), CGST, Central Excise & Customs. However, the appeal was dismissed by an order dated 21.08.2024, as the petitioner failed to submit the mandatory pre-deposit amount as required under Section 79(5) of the Assam Value Added Tax Act, 2003, which is akin to the pre-deposit under Section 35F of the Central Excise Act, 1944. The petitioner has now approached the High Court by way of a writ petition challenging the dismissal order.

Held

The Court held that while the appellate authority correctly dismissed the appeal for non-compliance with the statutory pre-deposit requirement under Section 79(5) of the Assam Value Added Tax Act, 2003, as per the ruling in Tecnimont Pvt. Ltd., the principle of equity, as emphasized in earlier Supreme Court decisions (State of AP Vs P Laxmi Devi and Har Devi Asnani Vs State of Rajasthan) and a Division Bench judgment (JSB Cement LLP), can be applied in genuine cases of hardship. The Court found that the petitioner was ready to make the required pre-deposit. Therefore, exercising its power under Article 226, the Court granted the petitioner the benefit of a hearing. The impugned order of dismissal was set aside, and the matter was remanded for a fresh hearing on merits, subject to the petitioner furnishing the statutory deposit within 30 days. The Court clarified that it had not adjudicated on the merits of the case. If the petitioner fails to appear or make the pre-deposit, the dismissed order will revive.

Key Issues

1. Whether the High Court, in exercise of its writ jurisdiction under Article 226 of the Constitution of India, can grant equitable relief to a petitioner who has failed to comply with the statutory pre-deposit requirement for filing an appeal, despite the appellate authority having no power to waive such a condition? Petitioner's argument: The petitioner argued that applying equitable principles, the Court can direct the appellate authority to hear the appeal on merits. Reliance was placed on the decisions in JSB Cement LLP Vs. State of Assam and Ors and Tecnimont Pvt. Ltd. Vs State of Punjab. Respondent's argument: The respondent contended that the appellate authorities acted within their jurisdiction and committed no illegality. They argued that the Supreme Court in Tecnimont Private Ltd. unequivocally held that appellate authorities cannot waive statutory pre-deposit requirements, and therefore, the High Court should not interfere with the decision in its certiorari jurisdiction.