Direction to pay 15% of Tax Amount during the Pendency of Adjudication is not valid: Gujarat HC [Read Order]

The Gujarat High Court has held that the direction to pay 15% of the tax amount during the pendency of adjudication is not valid.

Vinod Kumar Dugar, the petitioner challengedthe order of the Tribunaldirecting the petitioner to pay 20% of the entire amount. The petitioner has also expressed his inability to pay this much amount due to severe physical ailments and spondylosis at the L4 L5 level which compresses the existing nerve system.

The respondent already attached the commercial premises in the year 2014 and thereafter, in 2015 they have attached the shares of India Info Line Limited, Aditya Birla Limited, etc.

It was evident that as per the order dated 29.06.2019 under Section 73 of the VAT Act,  the authority concerned had permitted the payment of pre deposit of 15% of the tax amount. The First Appellate Authority also had adjudicated the matter as a substantial reduction from the total demand which had been raised in the concerned years.

There had been no challenge to the direction of 15% of the tax amount during the pendency of the adjudication. There is no reason as to why in the case of the very assessee when for the assessment years 2010-11 and 2011-12 the authority concerned had permitted the payment of a pre-deposit of 15% of the tax amount.

The Court observed that the matters are pending adjudication for a long time because these petitions have been pending since the Court issued the notice on 11.12.2019, nothing has moved so far as those two years are concerned and the matter has got entangled in this litigation taking a que from the subsequent year of 2010-11 and 2011-12.

A two-member bench Justice Sonia Gokani and Justice Sandeep N Bhatt allowed the petition by quashing and setting aside the impugned order dated 15.06.2015 passed by the Tribunal and relegating the petitioner to the First Appellate Authority for the deposit of 15% of the tax amount within a period of four weeks from the date of receipt of a copy of this order. The authority concerned is directed to accept the pre-deposits of 15% of the tax demand.

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