AHUJA EMPORIUM Vs. SALES TAX TRIBUNAL

JUDGEMENT

(1.) BY an order dated May 29, 1991, the Assessing Authority, Faridabad, created against the petitioner additional demands of Rs. 4,18,604 and Rs. 1,20,000 for the assessment years 1989-90 and 1990-91 respectively under the Haryana General Sales Tax Act, 1973 (for short, "the Act" ). Feeling aggrieved by this order, the petitioner filed appeals before the Joint Excise and Taxation Commissioner (Appeals), Faridabad, and also prayed for the stay of recovery and entertainment of appeals without prior payment of tax. The appellate authority rejected the request for stay of recovery but allowed the petitioner to make payment in monthly instalments of Rs. 10,000 payable by 20th of each month starting from November, 1991. Still not satisfied with the order, the petitioner filed an appeal before the Sales Tax Tribunal, Haryana. The Tribunal after considering the submissions made by the parties and the financial position of the petitioner, found that total amount involved was more than Rs. 5 lacs and the documents furnished by the petitioner did suggest that it was unable to make payment of the demand as directed by the Joint Excise and Taxation Commissioner (Appeals ). Since the petitioner had already deposited a sum of Rs. 50,000, the Tribunal directed the appellate authority to hear the appeals on merits without requiring the petitioner to deposit any further amount but it was directed to furnish surety for the balance amount. In pursuance of the directions issued by the Tribunal, the appeals filed by the petitioner were disposed of by the Joint Excise and Taxation Commissioner (Appeals) on merits and the same were dismissed. Being aggrieved by the appellate order, the petitioner filed an appeal before the Tribunal and also filed an application for its entertainment without prior payment of the tax. This time when the matter came up before the Tribunal, it, without going into the financial position of the petitioner, directed the latter to pay 50 per cent of the balance amount within a period of one month from the date of the order and further directed that the appeal be set down for regular hearing on September 4, 1994. The present order of the Tribunal was communicated to the petitioner as per letter dated August 17, 1994 (annexure P6 with the petition ). It is this order that has now been impugned before us in the present petition filed under article 226 of the Constitution.

(2.) THE argument of the learned counsel for the petitioner is that the Tribunal while requiring the petitioner to deposit 50 per cent of the balance amount within one month has not at all adverted to the requirements of the proviso to sub-section (5) of section 39 of the Act and no finding has been recorded in regard to its ability to pay the amount. There is merit in this contention. According to section 39 (5) of the Act, no appeal can be entertained unless it is filed within prescribed time and the appellate authority is satisfied that the amount of tax assessed and the penalty and interest, if any recoverable has been paid. The proviso to sub-section (5), however, enables the appellate authority to entertain an appeal without prior deposit of the assessed tax provided the appellate authority is satisfied that the person filing the appeal is unable to pay the whole of the amount of tax assessed or the penalty imposed or interest due. Therefore, while disposing of the application for the entertainment of an appeal without prior deposit of tax, what the appellate authority has to see is whether the assessee is really unable to deposit the assessed amount and this decision has to be based on the material placed before it. The appellate authority has indeed to apply its mind to the material before it and record a finding in regard to the financial position of the appellant and if it is satisfied that the appellant is unable to pay, the appeal has to be entertained without prior deposit. In the present case, a bare look at the impugned order shows that the Tribunal did not apply its mind to any of the relevant considerations what to talk of the material that was placed before it and no finding has been recorded in regard to the financial position of the petitioner herein. It is interesting to note that when the first appellate authority rejected the request of the petitioner for stay of recovery but allowed it to make the payment in monthly instalments of Rs. 10,000 starting from November, 1991, the Tribunal on the basis of the same material placed before it directed that the appeal be beard on merits without requiring the petitioner to deposit any further amount as it had already deposited a sum of Rs. 50,000. The appellate authority disposed of the appeal and now when a second appeal was filed before the Tribunal, surprisingly enough the latter has ignored the same material on the basis of which the earlier direction was given and the petitioner has been directed to deposit fifty per cent of the balance amount within a period of one month from the date of the order. Be that as it may, we are satisfied that the Tribunal has not adverted to the relevant considerations in terms of the proviso to section 39 (5) of the Act and, therefore, the impugned order cannot be sustained.