As numerous arguable points exists against adjudication order, it is remanded back to the assessing officer to conduct proceedings afresh.

1. Heard Mr. Akshay Vakil, learned advocate for the petitioner and Mr. Utkarsh Sharma, learned Assistant Government Pleader for the respondent.

2. Rule. Mr. Utkarsh Sharma, learned Assistant Government Pleader waives service of notice of rule on behalf of the respondent.

3. Having regard to the controversy involved in the present case which lies in a very narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for final hearing today.

4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 02.05.2018 passed by the Gujarat Value Added Tax Tribunal, Ahmedabad (hereinafter referred to as “the Tribunal”), whereby the second appeals preferred by the petitioner have been dismissed on account of non-compliance with the direction of pre-deposit. The petitioner has also challenged the order dated 06.01.2018 passed by the first appellate authority as well as the assessment order dated 30.03.2017.

5. Shortly stated the facts of the case are that the petitioner herein is carrying on the business of PVC resin, Acrylic sheets, plastic items etc. and due to closure of business in March, 2015, the certificate of registration was cancelled. It appears that the petitioner did not receive notices for assessment as the unit had closed down and therefore, the assessment proceedings were conducted ex-parte and by the impugned assessment order dated 30.03.2017, input tax credit of Rs.77,66,728/- claimed by the petitioner in its annual return came to be disallowed and a total demand of Rs.77,34,639/- together with interest of Rs.55,68,940/- and penalty of Rs.1,16,01,958/-, in all coming to Rs.2,49,05,537/- came to be imposed.

5.1 The petitioner preferred two appeals before the Deputy Commissioner of Commercial Tax, Appeal-1, Ahmedabad (hereinafter referred to as “the first appellate authority”) on 06.01.2018, who directed the petitioner to pre-deposit an amount of Rs.25,00,000/- under the Gujarat Value Added Tax Act, 2003 and 20% of the total demand under the Central Sales Tax Act, 1956. By an order dated 06.01.2018, the first appellate authority dismissed the appeals on the ground of non-payment of the pre-deposit.

5.2 The petitioner carried the matter in second appeal before the Gujarat Value Added Tribunal, who by an order dated 26.03.2018, confirmed the order of the first appellate authority, to the extent it had directed the petitioner to deposit Rs.25,00,000/- against the total demand of Rs.2,49,05,537/- within one month. Insofar as the demand under the Central Sales Tax Act, 1956 is concerned, the Tribunal after considering the copy of the “C” Form produced with the paper book, did not find it necessary to direct the petitioner to deposit any amount as pre-deposit for admission of the second appeal under the CST Act. Thereafter, by the impugned order dated 02.05.2018, the Tribunal dismissed both the second appeals on the ground of non-payment of pre- deposit despite the fact that in the second appeal under the CST Act, the Tribunal had not issued any direction to make pre-deposit for admission of the said appeal. Being aggrieved, the petitioner has preferred the present appeal.

6. Mr. Akshay Vakil, learned advocate for the petitioner submitted that the Assessing Officer while making the assessment order, has failed to consider the tax credit of Rs.77,66,728/- claimed by the petitioner in the annual return.

It was submitted that had such credit been considered, the liability under the GST Act would not have arisen. It was submitted that in case of the vendor, the first appellate authority had permitted him to prosecute the first appeal without making any pre-deposit and that therefore, on the ground of parity also, the petitioner was entitled to pursue the appeal without being directed to make any pre-deposit.

7. On the other hand, Mr. Utkarsh Sharma, learned Assistant Government Pleader submitted that the first appellate authority as well as the Tribunal have exercised their discretion and directed the petitioner to make pre-deposit and there being no infirmity in the impugned orders, there is no warrant for interference by this court.

8. It is an admitted position that the proceedings before the Assessing Officer went ex-parte as the petitioner was not served with the assessment notices issued by the concerned authority. It may be that such notice could not be served on account of closure of the business of the petitioner, nonetheless, it is a matter of fact that the assessment was ex- parte. In these circumstances, this court is inclined to remit the proceedings back to the Assessing Officer for fresh consideration and disposal in accordance with law. This is because the assessment order came to be passed ex-parte, pursuant to which huge demand of tax, interest and penalty has been confirmed. In the opinion of this court, the petitioner can be put to strict terms for appearing before the Assessing Officer. Besides, even if the petitioner had not participated in the proceedings, the authority concerned should have passed the order on the basis of material already on record and by applying the correct principles of law. There are many arguable points against the order of adjudication.

9. In the above view of the matter, the petition succeeds and is, accordingly, allowed to the following extent:

Considering the facts of the case, the impugned assessment order dated 30.03.2017 is hereby quashed and set aside. The matter is restored to the file of the Assessing Officer, who shall pass fresh orders after hearing the petitioner. To avoid confusion on the issue of service of notice, let the petitioner appear before the Assessing Officer personally or through an authorized representative on 17th December, 2018. There will be no formal notice from the said authority for the said purpose. This date is fixed only for the first hearing. It would be open for the Assessing Officer thereafter to adjust the future dates of hearing; as per his convenience. The petitioner shall participate in such proceedings and since it is pointed out that in the past, despite service of notices, the petitioner had not appeared, the petitioner shall pay cost of Rs.50,000/- (Rupees fifty thousand only) to the respondents.

10. Rule is made absolute accordingly, to the aforesaid extent, with no order as to cost.

Direct Service is permitted.

(HARSHA DEVANI, J)

(A. P. THAKER, J)