STATE OF GUJARAT Vs. SHANTI EXPORTS LTD

JUDGEMENT

(1.) The present Tax Appeal is filed for the purpose of challenging the legality and validity of the consolidated order dated 26.02.2015 passed by the learned Gujarat Value Added Tax Tribunal, at Ahmedabad (for short the "Tribunal) and this appeal is relating to an order of the Tribunal in so far as Second Appeal No. 405 of 2010 is concerned.

(2.) The background of the facts are that the subject matter property of one M/s. Arunoday Mills Ltd., came to be purchased in auction by the respondent - M/s. Shanti Exports Pvt. Ltd., as the said company could not meet with the financial liability of IDBI Bank. M/s. Arunoday Mills Ltd., was provided a financial assistance by IDBI Bank and the said Company was unable to discharge the loan liability. Resultantly, the Bank had to take recourse to a public auction of the property of the Company by way of issuing a public advertisement. A bid was invited for the purpose of purchase of movable and immovable assets of M/s. Arunoday Mills Ltd., on"as is where is and whatever there is basis". The respondent herein was found to be the highest bidder whose bid came to be accepted and the property of the Company was sold to the respondent herein by executing a deed of sale on 12.07.2007. The terms and conditions of the sale came to be provided by IDBI Bank vide its letter dated 08.02.2007. The case of the appellant - State is that for the financial year 2005 -06 in the case of M/s. Arunoday Mills Ltd., the Assessing Officer had framed an assessment and a demand of Rs.1,16,30,773/ - came to be raised vide order dated 30.11.2008. The said assessment order was challenged by the respondent herein as it has stepped into the shoes of M/s. Arunoday Mills Ltd., qua the property before the first appellate authority and the first appellate authority without entering into merits of the case vide order dated 29.04.2009 was pleased to dismiss the appeal only on the ground of pre -deposit requirement having not been satisfied. It appears that against the said order of the first appellate authority dated 29.04.2009, Second Appeal came to be filed bearing Second Appeal No. 405 of 2010. The said Second Appeal along with another Second Appeal No. 406 of 2010 in which also the order assailed was about non -compliance of pre -deposit and, therefore, the learned Tribunal took up the said Second Appeals along with another Second Appeal No. 407 of 2010 by clubbing together and by consolidated order dated 26.02.2015 has disposed of all the three appeals by common order and all the three appeals came to be partly allowed.

(3.) Mr. Tirthraj Pandya, learned Assistant Government Pleader has contended that the learned Tribunal has committed error of jurisdiction inasmuch as the scope of original Second Appeal No. 405 of 2010 is circumscribed to consider the issue relating to non -payment of pre - deposit and in the case on hand, the learned Tribunal has dealt with the Second Appeal on merit and, therefore, has contended that it has travelled beyond the scope of jurisdiction. The learned AGP for the appellant - State has submitted that it is a settled proposition of law propounded by series of decisions that if the first appellate authority has dismissed the appeal on the issue of pre -deposit, the merit of case is not to be examined at all. It has also been contended that qua the merit of the main appeal, no effective adjudication has taken place inasmuch as no proper opportunity to deal with the merit was given, but in essence, the learned AGP for appellant - State has submitted that the learned Tribunal ought not to have proceeded with the merit of the case. While substantiating this submission, the learned AGP for appellant - State has relied upon the decision of this Court delivered by the Division Bench of this Court in Tax Appeal No. 711 of 2013 dated 30.08.2013 in the case of State of Gujarat v. Tudor India Ltd., wherein, it has been specifically held that if the Tribunal is confronted with the situation whereby the issue with respect to non -payment pre - deposit under Section 73(4) of the Gujarat Value Added Tax Act is arising, then, it is not open for the learned Tribunal to go into the merits of the case as if a substantive appeal is to be heard. The learned AGP for the appellant - State further relied upon the decision delivered by the Division Bench of this Court in Tax Appeal No. 688 of 2013 dated 30.01.2014, wherein also similar view is taken that while examining the appeal qua non -payment of pre -deposit, merit of the main matter is not to be concluded by the learned Tribunal. By submitting this, the learned AGP for the appellant - State requested the Court not to permit such order of the learned Tribunal to be operated upon since this main issue for which Second Appeal is placed under consideration of this Court is regarding non -payment of pre -deposit issue. The learned AGP for the appellant - State has as such not drawn attention of the Court to the merit of the matter in so far as it relates to Second Appeal No. 405 of 2010.