KASTURI COMMODITIES PVT. LTD. Vs. STATE OF GUJARAT

JUDGEMENT

(1.) Heard learned counsel for the parties for final disposal of the appeals. Since the facts are common, we may record those arising in Tax Appeal No. 1133 of 2013.

(2.) The appellant was a registered dealer under the VAT Act and the Central Sales Tax Act, Certain purchases made by the appellant came under the scanner of the VAT authorities. A show-cause notice was issued alleging that such purchases were made from Taxraj Reality which was an unregistered dealer, in which case, the assessee would have to pay purchase tax and would be denied tax credit thereof. To avoid such a situation, the assessee created bogus purchase bills from registered dealers and availed of tax credit on the sales tax shown to have been paid by them. On such basis, recovery of tax, interest and penalty were confirmed by the assessing officer by his order dated December 20, 2011.

(3.) Under the VAT Act, the assessee had to pay an amount of Rs. 49,11,219 with interest and penalty and under the Central Sales Tax Act, it has to pay an amount of Rs. 4,11,613 plus interest and penalty. When the assessee challenged such order before the Appellate Commissioner, the Commissioner insisted that the appellant should deposit a sum of Rs. 23,00,400 by way of pre-deposit. Since the appellant failed to do so, on January 17, 2012, the Commissioner dismissed the appellant's appeals. Against such order, the appellant filed two separate appeals before the VAT Tribunal. The Tribunal during the course of such appeals, directed the appellant to deposit a total sum of Rs. 10 lacs by order dated February 14, 2012. When the appellant complied with such direction, the Tribunal proceeded to examine the appeal on the merits of the order passed by the assessing officer and partially dismissed the appeal confirming the disallowance of input-tax credit and consequential levy of tax and interest. So far as the penalty is concerned, the same was remanded back to the assessing officer to examine the issue afresh after giving an opportunity of being heard to the appellant. Operative part of the order of the Tribunal reads as under: