Matter can't be decided by relying on earlier decision if challenged in High Court

A matter can't be decided by relying on earlier decision of Tribunal which is challenged in High Court

CST & VAT: Gujarat VAT - Where Tribunal had remanded matter to First Appellate Authority with direction to decide appeal of assessee following its decision rendered in case of ONGC Ltd., since appeal against decision in case of ONGC Ltd. was pending before High Court, Tribunal could not have insisted for disposing of appeal following its decision

HIGH COURT OF GUJARAT

State of Gujarat

v.

Essar Oil Ltd.

M.R. SHAH AND S.H. VORA, JJ.

TAX APPEAL NOS. 254 AND 255 OF 2015
CIVIL APPLICATION (OJ) NOS. 321 AND 322 OF 2015
SPECIAL CIVIL APPLICATION NOS. 6989 AND 6990 OF 2015

MAY  1, 2015 

Section 73 of the Gujarat Value Added Tax Act, 2003 - Appellate Tribunal - Powers of - Assessment year 2008-09 - Tribunal set aside order passed by First Appellate Authority directing assessee to make payment of 20 per cent of total demand by way of predeposit - It remanded matter to him with direction to decide appeal of assessee keeping in mind decision of Tribunal rendered in case of ONGC Ltd. within three months - It also directed First Appellate Authority to refund amount of tax deposited by assessee by way of pre deposit with interest - Record showed that decision of Tribunal in case of ONGC Ltd. was pending for final disposal before High Court - Whether Tribunal could not have insisted for disposing of appeal by First Appellate Authority following decision in case of ONGC Ltd. - Held, yes - Whether direction given to revenue authorities to refund amount of tax deposited by assessee with interest was absolutely beyond scope and ambit of powers of Tribunal - Held, yes - Whether aforesaid amount deposited by assessee deserved to be refunded on furnishing unconditional and irrevocable bank guarantee of like amount in name of Commissioner - Held, yes [Paras 7.4,7.5 and 8] [Partly in favour of revenue]

FACTS

■		The Assessing Authority passed assessment order on the assessee and raised huge tax demand upon it.
■		The First Appellate Authority, on appeal filed against the order of assessment, directed the assessee to deposit 20 per cent of the tax demand and furnish guarantee for the remaining demand.
■		The Tribunal, on appeal filed against the order of the First Appellate Authority, initially directed the assessee to deposit a certain amount of tax demand and furnish bank guarantee of 5 per cent of the total tax demand.
■		Thereupon the assessee had deposited an amount of Rs. 18.69 crores and also furnished the bank guarantee of 5 per cent of the tax demand.
■		Thereafter the Tribunal passed a final order dated 26-8-2004 in the appeal of the assessee. It set aside the order passed by the First Appellate Authority directing the assessee to make payment of 20 per cent of the total demand by way of predeposit and remanded the matter to him with the direction to decide the appeal of the assessee keeping in mind its earlier decision rendered in the case of ONGC Ltd. within three months. It further held that if the First Appellate Authority failed to decide the appeal within a period of three months, the above amount paid by the assessee shall be refunded forthwith.
■		Against the above order dated 26-8-2004, the revenue filed a miscellaneous application before the Tribunal praying to modify its order in such a manner that it did not impose any outer time limit for deciding the first appeal pending before the First Appellate Authority. It pointed out that the decision of the Tribunal in the case of ONGC Ltd. was the subject matter of appeal before the High Court and the said appeal was admitted and pending for final disposal before the High Court.
■		However, the Tribunal by an order dated 20-2-2015 dismissed the miscellaneous application filed by the revenue and reiterated again and directed the First Appellate Authority to decide the appeal within stipulated time after following its decision in the case of ONGC Ltd. It also directed the revenue to refund the aforesaid amount deposited by the assessee with interest within 15 days.
■		On appeal to High Court by revenue:

HELD

■		When it was brought to the notice of the Tribunal that its decision in the case of ONGC Ltd. is subject matter of appeal before the High Court and the High Court has admitted the appeal on substantial question of law and appeal is pending for final disposal and the High Court is seized with the matter, the Tribunal could not have insisted for disposing of the appeal by the First Appellate Authority following its decision in the case of ONGC Ltd. The proper course on the part of the Tribunal would have been to remand the matter to the First Appellate Authority without any further direction and wait for the outcome of the appeal by the High Court.
■		Under the circumstances, the judgment and order passed by the Tribunal directing the First Appellate Authority to decide the appeal pending before him within a period of three months and that too after following the decision of the Tribunal in the case of ONGC Ltd. deserved to be quashed and set aside. [Para 7.4]
■		In the miscellaneous application preferred by the revenue, the Tribunal has directed the revenue to refund the amount deposited by the assessee with interest. The said order/direction is absolutely beyond the scope and ambit of the powers of the Tribunal. However, the assessee has stated that it may be permitted to withdraw the aforesaid amount on furnishing bank guarantee of the like amount, which would be continued till final disposal of the appeal before the First Appellate Authority. The suggestion made by the assessee seems to be reasonable. [Paras 7.5 and 7.6]
■		In view of the aforesaid, the impugned orders dated 26-8-2004 and 20-2-2015 were liable to be quashed and set aside. It is to be directed that on furnishing unconditional and irrevocable bank guarantee of Rs. 18.69 crore in favour of the Commissioner, the revenue shall return the said amount to the assessee forthwith. It is to be further directed that the First Appellate Authority shall decide and dispose of the appeal pending before him after the decision of the Division Bench of High Court in the appeal in the case of ONGC Ltd. [Para 8]