M/S. Bharat Enterprises vs. The State Of Bihar

Held

The Court held that the order of the Joint Commissioner, Commercial Taxes (Appeal) rejecting the petitioner's appeal for non-deposit of 20% of the assessed tax was unsustainable. The Court was persuaded by the legal position settled in the cases of M/s. Kanhaiya Traders and M/s Aman Enterprises, which were relied upon by the petitioner. The Court took note of the fact that the input tax credit available to the petitioner (Rs. 24,88,655/-) was far greater than the 20% of the assessed amount required for pre-deposit. Therefore, the Court quashed the impugned order and remitted the matter back to the appellate authority for a decision on merits. The appellate authority was directed to decide the appeal preferably within 8 weeks from the date of appearance of the petitioner, which was fixed for 06.05.2019.

Facts

The petitioner, M/s. Bharat Enterprises, is challenging an order dated 29.12.2018 passed by the Joint Commissioner, Commercial Taxes (Appeal), Saran Division, Muzaffarpur. The appeal was rejected because the petitioner failed to deposit 20% of the assessed tax, as mandated by Section 72(2) of the Value Added Tax Act, 2005. The petitioner contends that their input tax credit, amounting to Rs. 24,88,655/-, is significantly higher than 20% of the assessed amount. They rely on previous judgments by coordinate benches of this Court in similar cases where appeals were restored on merits after considering substantial input tax credit.

Key Issues

1. Whether the appeal filed by the petitioner was rightly rejected for non-compliance with the pre-deposit requirement under Section 72(2) of the Value Added Tax Act, 2005, when the petitioner claims to have substantial input tax credit available. Petitioner's Argument: The petitioner argues that the rejection of their appeal solely on the ground of failing to deposit 20% of the assessed tax is unsustainable. They rely on the principle established in cases like M/s. Kanhaiya Traders v. State of Bihar & Ors. and M/s Aman Enterprises v. State of Bihar & Ors., where the Court directed the appellate authority to decide appeals on merits if the available input tax credit exceeded the pre-deposit amount. The petitioner highlights their input tax credit of Rs. 24,88,655/- as evidence of this. Revenue's Argument: The State counsel opposed the petitioner's submission, referring to the statutory mandate. However, the specific arguments or precedents relied upon by the revenue are not detailed in the judgment.