SANJAYRAJ GLOBAL VENTURES Vs. STATE OF GUJARAT

JUDGEMENT

(1.) These two appeals arise in similar background. We may therefore,record facts from Tax Appeal No. 377 of 2015. The appellant has filed the appeal against the judgment of Valued Added Tax Tribunal dated 18.2.2015. The appellant is a registered dealer under Valued Added Tax Act, 2003. The appellant was assessed for the assessment year 2006-2007. During assessment, the Assessing Officer disallowed input tax credit of the assessee of Rs. 1.31 crores (rounded off) on the ground that the dealers from whom the goods were purchased were engaged in bogus billing activities and on that ground their registrations were cancelled ab initio. The case of the assessee is that the purchases were genuine and any subsequent cancellation of the registration of the sellers would not result into denial of input tax credit to the assessee- purchaser. Be that as it may, the Assessing Officer passed the order of assessment raising a total demand of Rs. 5 crores (rounded off) comprising tax of Rs. 1.34 crores (rounded off), interest of Rs. 96.94 lacs (rounded off) and penalty of Rs. 2.69 crores (rounded off). Against this order of assessment, the assessee filed an appeal to the Appellate Commissioner who directed the assessee to deposit 20 per cent of the total demand by way of pre-deposit as a condition to hear the appeal on merits. Since the assessee failed to do so, the appeal was dismissed only on this ground. Against this order, the assessee preferred further appeal before the Tribunal. Similar facts arise in other year. Total principal tax demand of the other year comes to Rs. 2.97 crores (rounded off). The Tribunal required the assessee to deposit Rs. 3 crores by way of pre-deposit but granted instalments, initially requiring the assessee to make a total pre-deposit of Rs. 40 lacs which the assessee did. Later on, however by the impugned order dated 18.2.2015, the Tribunal dismissed the appeal since the assessee could not deposit the entire amount of R. 3 crores as originally provided by the Tribunal.

(2.) Learned counsel for the assessee submitted that the assessee has already deposited Rs. 40 lacs by way of pre- deposit. Its financial condition would not permit any further pre-deposit. In any case, the department has attached six offices and one open plot belonging to the partners of the firm which could provide adequate security for the departmental dues. He therefore, requested that the Commissioner be directed to hear appeals on merits.

(3.) In our dated 6.6.2016, we had observed as under: