In the recent ruling, the High Court of Bombay overturned the dismissal of a Maharashtra Value Added Tax ( MVAT ) appeal for non-attendance, directing that the appeal be decided on its merits as per the statutory mandate.
National Building Construction,the petitioner-assessee,had filed an appeal under Section 26 of the MVAT Act, 2002, challenging the assessment order passed by the Deputy Commissioner of Sales Tax. However, the Joint Commissioner of Sales Tax (Appeals) dismissed the appeal due to the petitioner’s non-attendance at the hearing, and upheld the assessment order. This order was passed on October 22, 2019.
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The petitioner argued that the Appellate Authority(AA)’s dismissal of the appeal for non-attendance was incorrect. They contended that while Rule 36(2) of the MVAT Rules allows an appeal to be dismissed if the assessee fails to appear, this rule could not override the statutory provisions of Section 26(5)(a) of the MVAT Act.
According to the petitioner, Section 26(5)(a) mandates that the AA should decide the appeal on its merits, by either confirming, reducing, enhancing, or annulling the assessment order. The assessee stressed that statutory provisions must take precedence over procedural rules in case of conflict.
They further mentioned a delay in filing the petition, explaining that the impugned order was not communicated directly to them, which led to a delay in filing the petition. To address the delay, the petitioner offered to pay a cost of Rs.1,00,000 as a demonstration of their goodwill.
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The respondents argued that Rule 36(2) gave the AA the power to dismiss the appeal for non-attendance, and that an alternative remedy was available under Section 26(1)(c) of the MVAT Act.
The Division Bench comprising M.S.Jawalkar(Judge) and Avinash G.Gharote(Judge) ruled that statutory provisions take precedence over rules, citing legal precedents that support this position. The court quashed the impugned order, ruling that the appeal should be decided on its merits.
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The matter was remitted to the Appellate Authority, with the petitioner directed to appear on November 11, 2024. The appeal was to be decided within 30 days, subject to the payment of Rs.1,00,000 as costs.
In conclusion the petition was allowed.
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