M/S Swastik Agency vs. Commissioner Of CT And GST

Held

The Court held that the petitioner's contention that the pre-deposit made on 01.03.2021 was not considered by the Second Appellate Authority was misconceived. The Court noted that the petitioner's counsel clarified that the pre-deposit was made for the entertainment of the first appeal, not the second appeal. The Court emphasized that Section 77(4) of the OVAT Act mandates pre-deposit for the entertainment of the first appeal, not the second appeal. Consequently, the Sales Tax Tribunal (Second Appellate Authority) was correct in passing its order dated 02.07.2021. Furthermore, the Court observed that the petitioner's prayer in the writ petition did not include a request to quash the order of the first appellate authority. Given these findings, the Court concluded that the writ petition lacked merit and was not inclined to entertain it. The Court dismissed the writ petition.

Facts

The petitioner, M/s. Swastik Agency, filed a writ petition challenging an order dated 02.07.2021 passed by the Second Appellate Authority. The petitioner sought an opportunity of hearing, stating that a pre-deposit amount was made on 01.03.2021. The revenue contended that the petitioner filed the first appeal with a delay of 361 days and failed to deposit the mandatory 20% of the demanded tax as required under Section 77(4) of the OVAT Act. The first appeal was disposed of on 19.09.2018, and the pre-deposit was paid in March 2021, over two years later. The Second Appellate Authority dismissed the appeal on 02.07.2021. The petitioner's argument that the pre-deposit made on 01.03.2021 was not considered by the Second Appellate Authority was contested by the revenue.

Key Issues

1. Whether the Second Appellate Authority erred in not considering the pre-deposit made by the petitioner on 01.03.2021 when passing the order dated 02.07.2021, thereby violating the petitioner's right to be heard? Petitioner's contention: The petitioner argued that the pre-deposit amount was made on 01.03.2021 and should have been considered by the Second Appellate Authority, and that the petitioner was denied an opportunity of hearing. The petitioner sought to set aside the order of the Second Appellate Authority. Revenue's contention: The revenue argued that the first appeal was filed with a significant delay of 361 days and without the mandatory pre-deposit of 20% of the demanded tax, as required under Section 77(4) of the OVAT Act. The revenue further contended that the pre-deposit was made after a considerable delay of over two years from the first appellate order, and that the pre-deposit requirement under Section 77(4) is for the entertainment of the first appeal, not the second appeal. Therefore, the Second Appellate Authority's order was correct, and the writ petition should be dismissed.