Mandatory pre-deposit of 10% for entertaining appeal under Maharashtra VAT Act is a reasonable condition: HC

Case Details: United Projects v. State of Maharashtra - [2022] 141 taxmann.com 500 (Bombay)

Judiciary and Counsel Details

• • R.D. Dhanuka, Nitin W. Sambre & Abhay Ahuja, JJ.
  • Vikram Nankani, Sr. Adv. Prithviraj Chaudhari, Roshil Nichani, Mehul Taleva, Dhruv Nyadhish, Sandip Ghaterao, Prathamesh Gargate, N.V. Tapare, Prakash Shah, Jas Sanghavi & Mihir Mehta for the Petitioner.
  • Ashutosh Kumbhakoni, Adv. General Ms Jyoti Chavan, S.B. Lolge, Akshay Shinde, Adv., Ms Neha Bhide & P.P. Kakade, Gov. Pleader for the Respondent.

Facts of the Case

The Maharashtra Tax Laws (Amendment and Validation) Act, 2019 has amended the provisions of the Maharashtra Value Added Tax Act, 2002 to incorporate mandatory pre-deposit for filing appeals against the assessment orders pertaining to all the goods after 16th September, 2016. In this writ petition, the question before the Honorable Bombay High Court was:

Whether condition of 10% pre-deposit for entertaining appeal by appellate authority is onerous, unreasonable and violating Article 14 of Constitution?

High Court Held

The Court observed that the unamended provisions gave discretion to appellate authority to pass order of deposit from 0% to 100% which gave chance or hope for getting waiver. However, later on the State Government had provided a package wherein it prescribed condition of pre-deposit of 10% amount which resulted in staying recovery of 90% as a pre-condition for entertaining an appeal. The amended section prescribed 10% as amount of pre-deposit and stayed recovery of 90% which will not take away vested right, if any.

The Government can enact law stating no appeal shall lie or it may lie on fulfilment of pre-condition and such enactment can’t be said to be violating Article 14 or 19(1)(g) of Constitution. Therefore, it was held that amendment is constitutionally valid and pre-deposit of 10% amount would be a reasonable condition and it could not be considered as onerous.

List of Cases Reviewed

• • Anshul Impex (P.) Ltd. v. State of Maharashtra [Sales Tax Appeal No. 2 of 2018, dated 28-09-2018
  • Sheen Golden Jewels (India)(P.) Ltd. v. State Tax Officer [2019] 102 taxmann.com 208 (Ker.) (para 94)
  • Union of India v. VKC Footsteps India (P.) Ltd. [2021] 130 taxmann.com 193 (SC) (para 100)
  • Videocon International Ltd. v. SEBI [2015] 53 taxmann.com 245/129 SCL 673 (SC) (para 127)
  • Dream Castle v. CST [2016] 70 taxmann.com 256/56 GST 308 (Mad.) (para 129)
  • Newtech Promoters and Developers (P.) Ltd. v. State of Uttar Pradesh [2021] 132 taxmann.com 137/[2022] 169 SCL 455 (SC) (para 142)
  • Bhubaneshwar Singh v. Union of India [1994] 6 SCC 77 (para 143)
  • Meerut Development Authority v. Satbir Singh [1996] 11 SCC 462 (para 143)
  • Assistant Commissioner of Income Tax v. Netley ‘B’ Estate [2015] 56 taxmann.com 436/231 Taxman 760/372 ITR 590 (SC) (para 148)
  • Godrej Soaps Ltd. v. State of Maharashtra 2005 SCC OnLine Bom 1297 (para 149)
  • Chandra Sekhar Jha v. Union of India, 2022 SCC OnLine 269 (para 150)
  • Noopura Vishwajit Kulkarni v. State of Maharashtra, 2019 SCC OnLine Bom 1252 (para 156)
  • Gangadhar Palo v. Revenue Divisional Officer [2012] 21 taxmann.com 220/35 STT 463 (SC) (para 173)
  • Tecnimont (P.) Ltd. v. State of Punjab [2019] 111 taxmann.com 263 (SC) (para 175)
  • Bimolangshu Roy v. State of Assam [2018] 14 SCC 408 (para 179)
  • Haresh Nagindas Vora v. Union of India [Writ Petition No. 4315 of 2016, dated 19-6-2017] (para 192) followed.
  • Union of India v. Martin Lottery Agencies [2009] 20 STT 203 (SC) (para 120)
  • Reliance Industries Ltd. v. State of Gujarat [2020] 116 taxmann.com 210 (Guj.) (para 121)
  • Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh AIR 1953 SC114 (paras 124, 168)
  • S.R. Bhagwat v. State of Mysore [1995] 6 SCC 16 (para 161)
  • Ambika Prasad Mishra v. State of U.P. [1980] 3 SCC 719 (para 183)
  • ECGC Ltd. v. Mokul Shriram EPC JV, 2022 SCC Online SC 184 (para 184) distinguished.

List of Cases Referred to

• • Ansul Impex (P.) Ltd. v. State of Maharashtra [Sales Tax Appeal No. of 2018, dated 28-9-2018] (para 1)
  • Hossein Kasam Dada (India) Ltd. v. State of Madhya Pradesh AIR 1953 SC 114 (para 27)
  • Gangadhar Palo v. Revenue Divisional Officer [2012] 21 taxmann.com 220/35 STT 463 (SC) (para 29)
  • Tecnimont (P.) Ltd. v. State of Punjab [2019] 111 taxmann.com 263 (SC) (para 30)
  • Videocon International Ltd. v. SEBI [2015] 53 taxmann.com 245/129 SCL 673 (SC) (para 31)
  • Dream Castle v. CST [2016] 70 taxmann.com 256/56 GST 308 (Mad.) (para 32)
  • Newtech Promoters and Developers (P.) Ltd. v. State of Uttar Pradesh [2021] 132 taxmann.com 137/[2022] 169 SCL 455 (SC) (para 33)
  • State of Himachal Pradesh v. Narain Singh [2009] 13 SCC 165 (para 37)
  • Asstt. Commissioner v. Nelley ‘B’ Estat [2015] 56 taxmann.com 436/231 Taxman 760/372 ITR 590 (SC) (para 38)
  • Godrej Soaps Ltd. v. State of Maharashtra 2005 SCC OnLine Bom 1297 (para 39)
  • Ssangyong Engineering & Constructions Co. Ltd. v. National Highway Authority of India 2019 SCC OnLine SC 677 (para 40)
  • Oil and Natural Gas Corporation Ltd. v. Western Geco International Ltd. [2015] 54 taxmann.com 331/129 SCL 713 (SC) (para 40)
  • Associated Builders v. Delhi Development Authority [2015] 3 SCC 49 (para 40)
  • Noopura Vishwajit Kulkarni v. State of Maharashtra 2019 SCC OnLine Bom 1252 (para 41)
  • Bimolangshu Roy v. State of Assam [2018] 14 SCC 408 (para 43)
  • Sheen Golden Jewels (India)(P.) Ltd. v. State Tax Officer [2019] 102 taxmann.com 208 (Ker.) (para 49)
  • Union of India v. Mohit Minerals (P.) Ltd. [2018] 98 taxmann.com 45/69 GST 743 (SC) (para 51)
  • Shri Prithvi Cotton Mills v. Broach Borough Municipality [1969] 15 ITR 136 (SC) (para 62)
  • S.R. Bhagwat v. State of Mysore [1995] 6 SCC 16 (para 62)
  • State of Karnataka v. Karnataka Pawn Brokers Association [2018] 91 taxmann.com 228/255 Taxman 12 (SC) (para 62)
  • Union of India v. Martin Lottery Agencies [2009] 20 STT 203 (SC) (para 65)
  • Reliance Industries Ltd. v. State of Gujarat [2020] 116 taxmann.com 210 (Guj.) (para 65)
  • Govind Das v. ITO [1976] 1 SCC 906 (para 66)
  • CIT v. Vatika Township (P.) Ltd. [2014] 49 taxman.com 249/227 Taxman 121/367 ITR 466 (SC) (para 66)
  • Ganesh Yadav v. Union of India [2015] 59 taxmann.com 447 (All) (para 70)
  • Nimbus Communications Ltd. v. CST 2016 SCC Online Bom 6792 (para 70)
  • Ambika Prasad Mishra v. State of U.P. [1980] 3 SCC 719 (para 73)
  • ECGC Ltd. v. Mokul Shriram EPC JV, 2022 SCC Online SC 184 (para 75)
  • Sri Satya Nand Jha v. Union of India 2016 SCC Online SC 1627 (para 76)
  • Union of India v. Mohit Minerals (P.) Ltd. [2022] 138 taxmann.com 331/92 GST 101 (SC) (para 96)
  • Baijn A.A. v. State Tax Officer [2020] 114 taxman.com 567 (Ker.) (para 99)
  • Union of India v. VKC Footsteps India (P.) Ltd. [2021] 130 taxmann.com 193 (SC) (para 100)
  • Seth Nand Lal v. State of Haryana, 1980 (Supp.) SCC 574 (para 129)
  • Vijay Prakash D.Mehta v. Collector of Customs (Preventive) 1988 taxmann.com 619 (SC) (para 129)
  • Shyam Kishore v. Municipal Corporation of Delhi [1993] 1 SCC 22 (para 130)
  • State of Maharashtra v. Vishnu Ramchandra, AIR 1961 SC 307 (para 133)
  • Bhubaneshwar Singh v. Union of India [1994] 6 SCC 77 (para 143)
  • Meerut Development Authority v. Satbir Singh [1996] 11 SCC 462 (para 143)
  • State of Bihar v. State Pensioners Samaj [2006] 5 SCC 65 (para 144)
  • Chandra Sekhar Jha v. Union of India, 2022 SCC OnLine 269 (para 150)
  • Haresh Nagindas Vora v. Union of India [Writ Petition No. 4315 of 2016, dated 19-6-2017] (para 185)
  • Anant Mills Co. Ltd. v. State of Gujarat AIR 1975 SC 1234 (para 189)
  • Garikapatti Veeraya v. N.Subbaiah Choudhary, AIR 1957 SC 540 (para 193).