No error or illegality in dismissing appeal for non payment of 20% of tax demanded – SC

Appellate Authorities committed no error or illegality in dismissing the appeal for non payment of 20% of the tax demanded as provided in statute– Supreme Court

In a recent judgment, the Hon’ble Supreme Court dismissed the Special Leave Petition (SLP) of the assessee holding that there was no illegality in Appellate authorities dismissing the appeal for non payment of 20% of the tax demanded

ABCAUS Case Law Citation:
4676 (2025) (08) abcaus.in SC

In the instant case, the Statutory Appeal of the Petitioner before the Additional Commissioner, CT & GST, was dismissed as not maintainable as the petitioner fail to deposit 20% of the tax demanded, which was pre-condition for maintaining such an appeal.

The Revision Petition against the order of rejection of appeal was dismissed by the Commissioner of Sales Tax as the condition for pre-deposit of 20% of the disputed tax/demand had not been complied with. 

Aggrieved, the assessee filed a Writ Petition before the Hon’ble High Court challenging the dismissal of the Revision Petition praying that they may be permitted to deposit 10% of the disputed tax demand.

The Revenue relied on Section 16(4) of the Odisha Entry Tax Act, 1999 which provides that appeal against an order of assessment shall not be entertained by the Appellate Authority, unless it is accompanied by satisfactory proof of payment of admitted tax in full and 20% of the tax or interest or both, in dispute.

The Hon’ble High Court observed that once the statute has put a condition for entertainability of an appeal as condition precedent, such appeal in absence of the compliance thereof is not liable to be entertained by the Appellate Authority.

The Hon’ble High Court further stated that the word “entertained” has to be construed in a more pragmatic manner and should not be used zealously to secure the dismissal. Unless that deposit mandated under the said provision is made, the appeal would remain a dead letter and shall not be entertained by the Authority.

With respect to the prayer to deposit 10% of the disputed demand, the Hon’ble High Court observed that no reference can be found of the said numerical but for the sine qua none to make the appeal entertainable appellant is to deposit 20% of the disputed tax or interest or both.

The Hon’ble High Court further observed that it cannot pass an order which per se is contrary to the statutory provisions. The Court can neither rewrite the statute nor to incorporate any word into the statutory provisions. When the language used therein is unambiguous and conveys the laudable message, it does not call for any further interpretation to be made in this regard.

The Hon’ble High Court further noted that as manifested by Section 16 (4) of the State Entry Tax Act that 20% of the tax or interest or both in dispute should be deposited so that appeal can be entertained by the Authority and, therefore, the contention that the writ petitioner should be permitted to deposit 10% thereof was unsustainable.

The Hon’ble High Court permitted the petitioner to deposit 20% of the disputed tax or interest or both before the Appellate Authority and the Appellate Authority was directed to entertain the said appeal and pass appropriate order.

However, not satisfied with the judgment, the Petitioner filed a Special Leave Petition (SLP) before the Apex Court challenging the judgment of the High Court.

The Hon’ble Supreme Court held that there was no illegality in the judgment of the High Court and dismissed the SLP with following observation,

“We find no error or illegality in dismissing the appeal for non payment of 20% of the tax demanded. The present petition is, accordingly, dismissed.”

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