Karnataka High Court
Wind World (India) Infrastructure Pvt ... vs The State Of Karnataka on 9 January, 2024
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
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NC: 2024:KHC:1176
WP No. 251 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO.251 OF 2024 (T-RES)
BETWEEN:
WIND WORLD (INDIA) INFRASTRUCTURE PVT LTD
(FORMERLY KNOWN AS ENERCON (INDIA)
INFRASTRUCTURE PRIVATE LIMITED),
NO.10, BRUNTON ROAD, 3RD FLOOR,
CASA BIRGITTA,
BANGALORE-560 025
REPRESENTED HEREIN BY ITS
AUTHORISED SINGNATORY,
MR ASHOK KUMAR JHA.
...PETITIONER
(BY SRI. T. SURAYANARAYANA, SENIOR COUNSEL FOR
SMT. TANMAYEE RAJKUMAR, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA
REPRESENTED HEREIN BY ITS PRINCIPAL SECRETARY
FINANCE DEPARTMENT,
VIDHANA SOUDHA,
Digitally signed by BENGALURU-560 001.
LEELAVATHI S R
Location: HIGH
COURT OF 2. DEPUTY COMMISSIONER OF COMMERCIAL
KARNATAKA TAX (AUDIT) - 1.4, DVO-1,
BENGALURU-560 022.
...RESPONDENTS
(BY SMT. SHAMANTH NAIK, HCGP)
THIS W.P IS FILED UNDER ARTILCES 226 AND 227 OF THE
CONSTITUTION OF INDIA PRAYING TO WAIVE THE REQUIREMENT TO
DEPOSIT 30 PERCENT OF TAX OR OTHER AMOUNT DISPUTED IN THE
APPEALS FILED BY THE PETITIONER AGAINST ORDERS DATED
28/09/2018 (ANNEXURE C1 TO C5) PASSED BY THE JCCT(A) PENDING
BEFORE THE KARNATAKA APPELLATE TRIBUNAL IN STA NOS.399-
403/2018 FOR THE TAX PERIODS 2008-09 TO 2012-13 (ANNEXURES- D1
TO D5) RESPECTIVELY AND ETC.
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NC: 2024:KHC:1176
WP No. 251 of 2024
THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
Petitioner is an infrastructure company, which is engaged in construction of sub-station / switchyards for power evacuation in various states including Karnataka. It is contended that in terms of the facility use agreement entered into with its holding company viz., Wind World (India) Limited (for short, 'WWIL'), the petitioner has authorised WWIL to use, operate and maintain the facility i.e., the power sub-station / switchyard and towards this service, the petitioner collected usage charges on a monthly basis from WWIL.
It is contended by the petitioner that service tax was discharged by it on the said usage charges.
2. Heard learned Senior counsel for the petitioner and learned HCGP for the respondents.
3. The petitioner contend that respondent No.2 passed orders under Section 39(1) of the Karnataka Value Added Tax Act (for short, 'KVAT Act') erroneously holding that the sub-stations / switchyards are movable in nature and therefore, the petitioner ought to have discharged tax at applicable rates under the -3- NC: 2024:KHC:1176 WP No. 251 of 2024 provisions of the KVAT Act as the said transaction amounted to a 'transfer of right to use goods'. The First Appellate Authority having upheld the orders, petitioner has preferred appeals before the Karnataka Appellate Tribunal, Bengaluru.
4. The sole grievance of the petitioner before this Court in the present petition is that usage / lease rental charges are not being paid by the aforesaid holding company i.e., WWIL, which is now before the National Company Law Appellate Tribunal (for short, 'NCLAT'), in respect of which corporate insolvency resolution proceedings have been initiated and moratorium has been declared and the same is still pending adjudication. It is contended that in view of the aforesaid CIRP proceedings and restrictions imposed upon the resolution professional of WWIL for undertaking transactions with its related party including the petitioner, the lease rentals / usage charges due to the petitioner have remained outstanding for over 5 years and petitioner, who has not been generating any operational revenues for over 5 years and in fact, incurred huge loss and financial hardship and has resulted on petitioner, who has a negative reserve of Rs.454 crores, which reflects its financial instability as indicated in the -4- NC: 2024:KHC:1176 WP No. 251 of 2024 Financial Statements of the petitioner for the financial year 2018-19 to 2022-23 and is not in a position to pay the pre-deposit to an extent of 30% for the purpose of prosecuting the appeal. It is also contended the loans have remained outstanding for over 6 years and the petitioner has not only been classified as a non-performing asset (NPA) by the borrowers but proceedings under SARFAESI Act have also been initiated against the petitioner to take over possession of the petitioner's assets viz., sub-stations, and such proceedings are presently before the NCLAT, New Delhi. It is also contended that current account of the petitioner is under lien by the Commercial Tax Department, Karnataka towards outstanding tax liability under the KVAT Act and the fixed deposit account is under lien by the IDFC bank, one of the lenders due to the aforementioned defaults in repayment of loans.
5. Petitioner submits that it has an excellent case on merits to urge in the appeal and merely because it is not in a position to deposit 30% as contemplated under Section 63(4) of KVAT Act, its valuable right to go before the Appellate Authority should not be taken away and the petitioner be permitted to -5- NC: 2024:KHC:1176 WP No. 251 of 2024 prosecute the appeal by waiving the pre-deposit of 30% and without being compelled to pay the same.
6. Learned Senior Counsel for the petitioner submits that it is permissible for this Court in the exercise of its jurisdiction under Article 226 of the Constitution of India to regulate and module the requirement of pre-deposit and issue necessary directions regarding lesser deposit or complete waiver of pre-deposit. In this regard, reliance is placed on the following judgments:
i. Tecnimont (P.) Ltd. Vs. State of Punjab - (2019) 111 taxmann.com 263 (SC);
ii. Mohammed Akmam Uddin Ahmed & Ors Vs. Commissioner Appeals Customs and Central Excise & Ors (Delhi HC) - W.P.(C) 1242/2022 & CM APPL.3625/2022 dated 28.04.2023;
iii. Bharat Earth Movers Limited, Bangalore Vs. State of Karnataka and Others - 2016 (84) Kar.L.J. 332 (HC);
iv. Hare Krishna Enterprises Vs. State of Karnataka & ors - WP No.7918/2022 (T-RES) dated 02.03.2023;
v. M/s. Vega Auto Accessories (Pvt.) Ltd. Vs. Registrar, CESTAT and another - 2018 SCC Online Del 9219;
-6-NC: 2024:KHC:1176 WP No. 251 of 2024 vi. M/s. Shiva Tex Fabs Ltd. Vs. State of Punjab and ors. - CWP- 2650-2022 dated 03.10.2023;
vii. Nagrath Paints (P) Ltd. Vs. Union of India - 1997 SCC Online All 1518;
viii. Reliance Cellulose Products Ltd. Vs. CCE & C. & S.T., Hyderabad - 2014 SCC Online Hyd 1496.
7. Per contra, learned HCGP for the respondents would submit that the provisions being mandatory in nature, the petitioner has no option but to deposit 30% of the tax amount failing which, he would not be entitled to prosecute the appeal and as such, there is no merit in the petition and the same is liable to be dismissed.
8. I have given my anxious consideration to the rival submissions.
9. Before adverting to the rival contentions, it would be profitable to extract Section 63(4) of KVAT Act reads as under:
The appeal, or the memorandum of cross-objections, shall be in the prescribed form, shall be verified in the prescribed manner, and, in the case of an appeal preferred by any person other than an officer 1 [empowered by the State Government or the Commissioner] 1 under sub-section (1) shall be accompanied by 2 [proof of 3 [payment of thirty per cent of tax] 3 or other amount disputed and also] 2 a fee equal to two percent of the amount of assessment objected to, provided that the sum payable -7- NC: 2024:KHC:1176 WP No. 251 of 2024 in no case be less than two hundred rupees or more than one thousand rupees.
10. In the recent judgment of the Delhi High Court, in the case of Mohammed Akmam Uddin Ahmed & Ors v.
Commissioner Appeals Customs and Central Excise & Ors -
W.P.(C)1242/2022 & CM APPL.3625/2022 dated 28.04.2023, while dealing with the identical provisions regarding pre-deposit under the Customs Act, the Division Bench of the Delhi High Court has held as under:
"12.1 However, as discussed above, the Coordinate Benches of this Court have exercised and, thus, preserved the power as available under Article 226 of the Constitution of India, 1950 to either waive the pre-deposit condition or to grant the right to appeal subject to a part deposit or security. The power, albeit, has been exercised only in rare and exceptional cases."
In the aforesaid judgment, the Delhi High Court has come to the conclusion that waiving the pre-deposit condition or grant right to appeal subject to a part-deposit or security can be exercised by the High Courts under Article 226 of the Constitution of India only in rare and exceptional cases.
11. Similarly, in the case of Hare Krishna Enterprises Vs. State of Karnataka and others - WP No.7918/2022 dated -8- NC: 2024:KHC:1176 WP No. 251 of 2024 02.03.2023 while dealing with Section 63(4) of the KVAT Act, the learned Co-ordinate Bench of this Court has taken into account of earlier judgments of this Court and has held as under:
"The petitioner has impugned the common order dated
03.03.2022 by the Karnataka Appellate Tribunal, Bengaluru [for short, 'the Tribunal'] in STA Nos.74, 75 and 76 of 2021 under Section 63 of the Karnataka Value Added Tax Act 2003 (for short, 'the KVAT Act'). The Tribunal by the impugned common order has rejected the petitioner's application for waiver of pre-deposit under Section 63(4) of the KVAT Act, and the petitioner's appeals in STA Nos.74, 75 and 76 of 2021 must stand rejected because the petitioner has not made the necessary pre-deposit. However, on 21.04.2022 this Court has granted stay of dismissal of the petitioner's appeals.
2. The petitioner, apart from calling in question the Tribunal's common order dated 03.03.2022, had challenged the validity of the provisions of Section 63(4) of the KVAT Act as arbitrary and unconstitutional, but consequent to this Court's orders dated 13.04.2022 and 20.04.2022, the prayers in this regard stand deleted. As such, the question that remains for consideration is whether there must be interference with the Tribunal's common order refusing to grant waiver of pre-deposit. The Tribunal has opined that waiver of pre- deposit cannot be granted, and Tribunal's opinion is in the light of this Court's decision in Holeyappa C Nayak V/s. The Karnataka 1 Appellate Tribunal, Bengaluru and others . The Tribunal has finally concluded thus while rejecting the petitioner's application:
"In view of aforesaid reasons, in the light of clear provision of law u/s.. 63(4) of the KVAT Act, 2003 and decision/s of the Hon'ble High Court of Karnataka, we are of the considered opinion that this KAT is not vested with power or discretion to waive of or dispense with the payment of predeposit because, it is mandate of law."
1 This petition is disposed of by the order dated 07.03.2009.
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3. Sri Sandeep Huilgol, the learned counsel for the petitioner, submits that the petitioner's grievance as against the order- in-original is essentially because the petitioner is denied the benefit of input tax credit [ITC] on the ground that the Returns in Form VAT 100 are filed belatedly, but the question whether ITC could be denied when the Returns are filed belatedly is pending consideration before the Hon'ble Supreme Court in Civil Appeal No.4936/2016. If the Hon'ble Supreme Court holds that the benefit of ITC will not be available to an assessee who has filed belated Returns, the petitioner's grievance will fail and therefore the appeals before the Tribunal under Section 63 of the KVAT Act would also fail. With the afore as prefatory submissions, Sri Sandeep Huilgol submits that this Court must grant waiver of the pre-deposit as contemplated under Section 63(4) of KVAT Act and grant further liberty to the petitioner to seek deferment of the appeals by the Tribunal under Section 63(5) of the KVAT Act.
4. Sri.Sandeep Huilgol submits that the Assessing Officer does not dispute that the petitioner has paid taxes for the purchase during the relevant period viz., from February 2014 to September 2015 and these amounts have also been remitted by the concerned manufacturer/distributor. Though the petitioner cannot deny that the Returns for the aforesaid period are filed in the month of November 2015 after inspection in the month of September 2015, bona fides are pleaded in placing on record that the Managing Partner's wife was suffering from cancer and was undergoing frequent hospitalization until she breathed her last in the month of April 2015. There is no loss to the State Exchequer or evasion of tax, and the order-in-original visits petitioner with harsh terms.
5. Sri Sandeep Huilgol further submits that unless there is a final decision on the question whether the benefit of ITC should be denied because Returns are filed belatedly, there would be multiple proceedings in the present instance, and such final decision could only be with the decision of the Hon'ble Supreme Court in the pending proceedings in Civil Appeal No.4936/2016. The petitioner, who has placed on record bonafide circumstances to show just cause against delay, cannot be denied the benefit of ITC, and ultimately the petitioner's grievance would be addressed with the decision of the
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NC: 2024:KHC:1176 WP No. 251 of 2024 Hon'ble Supreme Court and consideration of the circumstances that could justifiably explain the delay.
6. Sri Sandeep Huilgol argues that this Court, in deciding on the petitioner's request for waiver of pre-deposit under Section 63(4) of the KVAT Act, must consider the afore circumstances and decide on the petitioner's further request for deferring the proceedings in STA Nos.74, 75 and 76 of 2021 under Section 63(5) of the KVAT Act. In comparable circumstances, this Court has granted certain waiver and in this regard, he places reliance upon the decision of this Court in 2 3 W.P.No.16323/2016 and W.P.No.9511/2021 with caveat that this Court, while considering the question of waiver of pre-deposit for stay under Section 62 of the KVAT Act in these cases, has granted such waiver in the light of the fact that the petitioners in such cases were public undertakings.
7. Sri Hema Kumar K., the learned Additional Government Advocate for the respondents on the other hand, submits that the stipulation under Section 63(4) of the KVAT Act for pre-deposit is part of the scheme of appeal as contemplated under Sections 62 and 63 of the KVAT Act. He emphasizes that for an appeal under Section 63 of the KVAT Act, no pre-deposit is contemplated, and deposit is envisaged only for considering the request for stay. However, in the case of the second appeal under Section 63 of the KVAT Act, pre- deposit is made a condition for filing an appeal with discretionary jurisdiction in the Tribunal to grant stay insofar as the remaining amount in demand under Section 63(7) of the KVAT Act. This Court, in the light of this scheme, may not grant any waiver.
8. Sri Hemakumar K relies upon the decision of this Court in W.P.No.44778/2019 to persuade this Court to opine that pre-deposit of 30% of tax or other amounts is mandatory and cannot be waived. He relies upon paragraph 4 of this order which reads hereunder:
"Section 63[7][a] of the Act contemplates that the Appellate Tribunal may, in its discretion, stay payment of seventy percent of the tax or other amount disputed, 2 This petition is disposed of on 24.03.2016. 3 This petition is disposed of on 23.06.2021.
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NC: 2024:KHC:1176 WP No. 251 of 2024 if the appellant makes payment of the thirty percent of the tax or other amount disputed along with the prescribed form of appeal. This payment of 30% of the tax or the other amount disputed is mandatory and the same cannot be waived of, as claimed by the petitioner. Hence, there is no substance in the writ petition to set aside the order impugned."
As regards, the petitioner's request for deferment of the proceedings in STA Nos.74, 75 and 76 of 2021 under Section 63(5) of the KVAT Act until the decision of the Hon'ble Supreme Court in Civil Appeal No.4936/2016, Sri Hemakumar submits that the petitioner could always make this request with the Tribunal after making the mandatory pre- deposit.
9. This Court must at the very outset observe that the Tribunal will have to examine the question whether the petitioner must be denied the benefit of ITC only because the Returns are filed belatedly in the light of the law that prevails as of the date of its decision. Further, the petitioner's request for deferment under Section 63(5) of the KVAT Act is premature as such request can be made only when the appeals are registered and admitted by the Tribunal. Redoubtably, the appeals would be registered and admitted only when there is pre-deposit in compliance with the provisions of Section 63(4) of the KVAT Act. As such, this Court must consider, as first mentioned, whether there must be interference with the Tribunal's impugned common order refusing to grant waiver of pre-deposit.
10. It is seen from the different decisions relied upon by Sri.Sandeep Huilgol, including the decision in Bharat Earth Movers 4 Limited, Bangalore v. State of Karnataka and Others and in writ petition No.16323/2016 that in the cases of public undertakings the requirement of pre-deposit is modulated providing for lesser percentage with further directions to furnish bank guarantee. These decisions have prevailed without challenge, and it follows from this that this Court in 4 (2016) 84 Kar.L.J. 332
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NC: 2024:KHC:1176 WP No. 251 of 2024 exercise of jurisdiction under Article 226 of the Constitution of India has modulated the requirement of pre-deposit depending on the facts and circumstances of the case. The modulation is in due deference to the statutory provisions and also to ensure that the appellate remedy is adequately exhausted. In fact, in the decision of a Division Bench of 5 the High Court of Gujarat , which is relied upon by Sri Sandeep Huilgol, the requirement of pre-deposit is modulated even in the case of an entity that is not a public undertaking. For these reasons, this Court is not persuaded to opine that the petitioner's request for waiver of pre- deposit must be rejected in its entirety, and the request in this regard must be considered in the peculiarities of the case.
11. The petitioner's first appeal under Section 62 of the KVAT Act is decided in the backdrop of the questions whether the petitioner must be allowed the benefit of output tax as also the benefit of ITC when Returns in Form VAT 100 are filed belatedly after departmental inspection, and the petitioner is allowed the benefit of output tax but not the benefit of ITC because the Returns are filed belatedly. These circumstances must be considered to decide the subject question, and this Court must also consider the petitioner's assertion that if ultimately it is concluded, as a matter of law by the Hon'ble Supreme Court, that the delay in filing the returns would disentitle the petitioner to the benefit of input tax credit, the petitioner's grievance will not survive for consideration even before the Tribunal. If it is held otherwise, the bonafides pleaded by the petitioner must be examined.
12. It is contended on behalf of the petitioner [a dealer] that it has paid taxes for the purchase during the relevant period viz., from February 2014 to September 2015 and these amounts have also been remitted by the concerned manufacturer/distributor and hence, there is no evasion of tax. These assertions are not contested. The petitioner, though after departmental inspection, has filed Returns in the month of November 2015. In support of the belated filing of the Returns, the 5 "Vinod Kumar Dugar, Proprietor of Arihant Enterprise v. State of Gujarat" in R/Special Civil Application No.21012/2019 and connected matters disposed of on 30.01.2023.
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NC: 2024:KHC:1176 WP No. 251 of 2024 petitioner has stated that the Managing Partner's wife was suffering from cancer, and she was undergoing treatment with frequent hospitalization until her demise in the month of December 2015, and that this unexpected and unfortunate turn of events created a strain and as such, the Returns are not filed in time. These circumstances must have due play even at this stage.
13. On careful consideration of these circumstances, and this Court's opinion on modulating the requirement of pre-deposit under Section 63(4) of the KVAT Act in the light of the earlier decision of this Court, this Court is of the considered view that the petitioner, which cannot be granted complete waiver, must deposit 50% (15% of the amount in demand) of the requirement of pre-deposit under Section 63(4) of the KVAT Act with reasonable time. Hence, the following:
ORDER [a] The petition is allowed in part, and the Tribunal's order dated 03.03.2022 in STA Nos.74, 75 and 76 of 2021 is modified. The petitioner is permitted to deposit 50% (that is 15% of the amount in demand) as required under Section 63(4) of the KVAT Act and the petitioner shall be at liberty to make this deposit within six (6) weeks from the date of receipt of a certified copy of this order.
[b] If the petitioner makes deposit as now permitted within the time allowed, the Tribunal shall consider, in accordance with law, the petitioner's application, if filed, under Section 63(5) of the KVAT Act for deferring the proceedings in STA Nos.74, 75 and 76 of 2021 until the decision of the Hon'ble Supreme Court in Civil Appeal No.4936/2016."
12. Similarly, in the case of Bharat Earth Movers Limited, Bangalore Vs. State of Karnataka and others -
2016(84) Kar.LJ 332 (HC), 2023 while dealing with Section 63(4)
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NC: 2024:KHC:1176 WP No. 251 of 2024 of the KVAT Act, the Coordinate Bench of this Court has held as under:
"Petitioner is a public sector undertaking which has assailed endorsement dated 07.07.2014 issued by the 3rd respondent authority (Annexure-A). By that endorsement, 3rd respondent has demanded the outstanding dues of tax from the petitioner. That endorsement was issued pursuant to the order of reassessment passed under Section 39 of the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'the Act' for brevity) by the 2nd respondent. Petitioner has also stated that as against the order of reassessment, it has filed an appeal before the 4th respondent-Joint Commissioner of Commercial Taxes (Appeals) but the said appeal has not yet been taken up for hearing. In the interregnum, the impugned endorsement has been issued.
2. I have heard the learned Counsel for the petitioner and learned AGA for the respondents and perused the material on record.
3. During the course of submission, learned counsel for the petitioner drew my attention to Section 62 of the Act, which deals with appeals. Sub-section 4 of Section 62 states that no appeal against an order of assessment shall be entertained by the appellate authority unless it is accompanied by satisfactory proof of the payment of tax and other amount not disputed in the appeal.
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4. Petitioner's counsel stated that in the instant case the entire tax liability has been disputed. Under clause (c) of sub-Section 4 of Section 62 of the Act, it is stated that the appellate authority may, in its discretion, stay payment of 70% of tax and other amount, if the appellant makes payment of the balance 30% of the tax and other amount along with prescribed form of appeal. In this context, it was contended that the petitioner being a public sector undertaking cannot be coerced to deposit 30% of tax. In support of the above plea, reliance was placed on an order of the Hon'ble Supreme Court in the case of BHARAT PETROLEUM CORP. LTD., VS. COMMISSIONER OF SALES TAX AND OTHERS reported in [2008] 17 VST 162 SC wherein in that case, the Honb'le Supreme Court waived the deposit of Rs.1.34 crores pending hearing of an appeal before the appellate authority. He therefore contended that in the instant case, the outstanding dues claimed by the department is Rs.33,90,93,440-00 and that 30% of that amount would be around Rs.10 crores and odd. When the petitioner is not liable to pay any amount of tax, insisting for payment of 30% of the tax in terms of clause (c) of sub-Section 4 of Section 62 of the Act would be a huge liability on a public sector undertaking. It was therefore contended that relief be granted to the petitioner by waiving the deposit of even 30% of the tax amount.
5. Per contra, learned AGA appearing for the respondents expressed apprehension on any such waiver
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NC: 2024:KHC:1176 WP No. 251 of 2024 being granted to the petitioner as it could become precedent in respect of other assesses and it would be by passing the provision of sub-Section 4 of Section 62 of the Act. He also contended that the petitioner is a company which is in comfortable financial condition and that no hardship whatsoever would be caused to the petitioner, if the statutory deposit is to be made. He also contended that the Hon'ble Supreme Court granted relief to Bharath Petroleum Corporation Limited having regard to the fact that it was a public sector company selling kerosene via PDS route and no comparison can be made between the petitioner with Bharat Petroleum Corporation Limited.
6. Having heard the contentions of both sides and keeping in mind the facts of the present case and also the decision of the Hon'ble Supreme Court, it is noted that as against the outstanding tax dues, the case of the petitioner is that it is not liable to pay the dues. No opinion is expressed on that aspect of the matter as it is pending consideration before the appellate authority. However, the only interference that can be made in these Writ Petitions is as to whether the petitioner should deposit 30% of the tax dues before the appellate authority in terms of Section 62 (1)(4)(c)(i) of the Act. Reliance could be placed on the order of the Hon'ble Supreme Court to the extent that both the petitioner therein as well as the petitioner before the Hon'ble Supreme Court viz., Bharat Petroleum Corporation Limited and the petitioner herein are the public sector undertakings. The Hon'ble Supreme Court in that case held that deposit of Rs.1.34 crores to be made before the
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NC: 2024:KHC:1176 WP No. 251 of 2024 appellate authority be waived as it was a huge sum and therefore, granted relief to the petitioner therein. In the instant case, even 30% of the tax to be deposited would be around Rs.10 crores and odd, which indeed is a greater amount. The petitioner is a public sector undertaking and is in a comfortable and good financial condition. In that view of the matter, 70% of the dues need not be deposited before the appellate authority and instead of waiving deposit of 30% of the tax amount before the appellate authority, the petitioner is directed to give a bank guarantee to the satisfaction of the appellate authority on or before 01.08.2014. If such a bank guarantee is given by the petitioner, the appellate authority to consider the case of the petitioner on merits and dispose it in accordance with law. In addition, petitioner also undertake to pay the entire tax dues with interest in accordance with provisions of the Act within a period of one month from the date of the order of the appellate authority in case it is unsuccessful before that authority. This undertaking is of course is subject to any further orders that to be made by any other authority. The aforesaid undertaking is placed on record. Annexure- A shall be kept in abeyance till 01.08.2014.
With the aforesaid directions and observations, these Writ Petitions stand disposed.
It is made clear that this order has been made keeping in mind the fact that the petitioner is a public sector undertaking and cannot be treated as precedent of in respect of other assesses."
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NC: 2024:KHC:1176 WP No. 251 of 2024 The other judgments relied upon by the petitioner also reiterate the same principle.
13. The aforesaid judgments will clearly indicate that it cannot be said that this Court while exercising its power under Article 226 of the Constitution of India is powerless either to reduce the quantity of pre-deposit or to waive it completely depending on the facts obtaining in the specific cases.
14. Insofar as the judgments relied upon by learned HCGP is concerned, the same were rendered in the facts and circumstances obtaining in the said case and no ratio, much less any principle of law is laid down to the effect that this Court does not have powers / jurisdiction under Article 226 of the Constitution of India to waive / reduce the pre-deposit.
15. Under these circumstances, I am of the considered opinion that depending on the peculiar / special facts and circumstances of a case, it is always open for this Court to waive / reduce, etc., the pre-deposit condition prescribed under Section 63 (4) of the KVAT Act, especially in the light of the judgment of this Court in Hare Krishna Enterprises' case and Bharat Earth Movers Limited case referred to supra.
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16. In the instant case, the material on record discloses that the petitioner has not earned any revenue for over five years and being a holding company, petitioner is also undergoing corporate insolvency resolution process / proceedings. Further, moratorium has been declared as long back as on 20.02.2018 and there is complete and total financial instability insofar as the petitioner is concerned as is clear from the financial statements produced by the petitioner, which is sufficient to come to the conclusion that the petitioner is not in a position to pay any amount for the purpose of maintaining the appeal, much less pre-deposit of 30% as required under Section 63(4) of the KVAT Act.
17. Learned Senior counsel for the petitioner submits that while the appeals filed by the petitioner which are pending before the Appellate Tribunal pertain to the period 2008-09 to 2012-13, in which, the petitioner has urged several contentions, the very same *Join commissioner of Commercial Taxes(Appeals) in appeals filed by the very same petitioner for the period 2013-14 has accepted the contentions urged by the petitioner and allowed the said appeal for the subsequent period and the same is yet another circumstance to permit the petitioner to prosecute the appeals without insisting of 30% pre - deposit * Corrected vide Chamber order dated: 14.03.2024.
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NC: 2024:KHC:1176 WP No. 251 of 2024 payment by the petitioner. The said submission is placed on record.
18. The cumulative effect of the facts and circumstances narrated above and the judgments of this Court in BEML's case and Hare krishna Enterprises case is sufficient to come to the conclusion that in the peculiar / special facts and circumstances obtaining in the case on hand including the financial distress and inability on the part of the petitioner to make payment of 30% pre-
deposit, I am of the considered opinion that the present petition deserves to be allowed and the Appellate Tribunal be directed to entertain the Sales Tax Appeal *Nos.399-403/2018 filed by the petitioner and permit it to maintain and prosecute the said appeal without insisting upon the petitioner to make payment of 30% pre-deposit and dispose of the appeal on merits as expeditiously as possible.
19. In the result, I pass the following:
ORDER
(i) The petition is hereby allowed.
(ii) Petitioner is permitted to maintain and prosecute Sales Tax Appeal *Nos.399-403/2018 before the Karnataka Appellate Tribunal, Bengaluru, which is hereby directed to entertain the appeal and * Corrected Vide Chamber order dated: 14.03.2024.
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NC: 2024:KHC:1176 WP No. 251 of 2024 pass appropriate orders on merits without insisting for payment of 30% pre-deposit, in accordance with law, as expeditiously as possible.
(iii) It is made clear that the present order is passed in the peculiar / special facts and circumstances of the instant case and this order shall not be treated as a precedent nor shall the same carry any precedential value for any purpose whatsoever.
Sd/-
JUDGE SV/SRL