Vvf (INDIA) LTD. vs. The State Of Maharashtra Through The Govt. Pleader And Ors.

Held

The Court held that payments made under protest during investigation proceedings cannot be construed as pre-deposit for the purposes of Section 26(6A) of the MVAT Act. The Court reasoned that Section 26(6A) imposes pre-conditions for filing a first appeal, requiring proof of payment of specified amounts. Interpreting payments made under protest during investigation as compliance with Section 26(6A) would 'do violence to the plain language of the Act.' The Court found no merit in the petitioner's argument that the amount paid under protest should be adjusted against the pre-deposit. The judgment of the Madras High Court in E.I.D. Parry (India) Limited was deemed inapplicable. The Supreme Court's judgment in Tecnimont Pvt. Ltd. was also referenced. Consequently, the writ petition was dismissed. However, upon the petitioner's request, the Court granted four weeks' time to comply with the pre-deposit provision, after which the Appellate Court was directed to entertain and decide the appeal on merits.

Facts

The petitioner, VVF (India) Limited, challenged a letter dated June 4, 2018, from the Joint Commissioner of Sales Tax, seeking directions to the Joint Commissioner of Sales Tax (Appeals-V) to accept their appeal against an assessment order dated December 26, 2017, without further pre-deposit. The petitioner had purchased natural gas from Gujarat and was assessed for Entry Tax for Assessment Years 2012-13 and 2013-14. During an investigation, the petitioner paid Rs. 3,64,24,388/- under protest towards alleged Entry Tax liabilities for AY 2013-14 and revised its returns. The assessment order demanded a total of Rs. 27,98,36,344/-, with Rs. 24,34,11,956/- remaining payable after adjustments. The petitioner argued that the pre-deposit of 10% of the disputed tax was met by the amount already paid under protest, as it exceeded the required Rs. 1,04,45,470.80.

Key Issues

1. Whether payments made under protest during investigation proceedings can be considered as pre-deposit for filing an appeal under Section 26(6A)(c) of the MVAT Act, thereby satisfying the pre-condition for appeal. Petitioner's Argument: The petitioner contended that payments made under protest, even if during investigation, should be considered towards the pre-deposit requirement. They argued that filing returns under protest does not equate to acceptance of tax liability, and the amount already paid under protest exceeded the 10% pre-deposit requirement. They relied on the principle that payment under protest cannot be regarded as acceptance of tax liability. Revenue's Argument: The revenue argued that payments made under protest during investigation proceedings could not be considered as pre-deposit for the purposes of Section 26(6A) of the MVAT Act. They contended that such payments were adjusted against the total tax liability in the assessment order, and therefore, an additional pre-deposit was required to file the appeal. The revenue implicitly relied on the plain language of Section 26(6A) which mandates proof of payment of specific amounts as pre-conditions for appeal.