# M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF TELANGANA & ORS

- **Citation:** [2019] 9 S.C.R. 94
- **Court:** Supreme Court of India
- **Decided:** 2019-07-10
- **Case number:** Civil Appeal No.7574 of 2014
- **Bench:** A.M. Khanwilkar, Ajay Rastogi
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-s-e-graphites-private-limited-v-state-of-telangana-ors-34336
- **Pages:** 29

## Headnote

Andhra Pradesh General Sales Tax Act, 1957 - Proviso to
s.19 and s.21(2) - Appellate Authority rejected the appeals
preferred by the concerned appellants-assessees under the
provisions of 1957 Act or 2005 VAT Act of AP or Telangana, as the
case may be - Appeals were dismissed inter alia on the ground that
the appellants failed to comply with the pre-condition of producing
proof of payment of tax admitted to be due for the relevant
assessment year in respect of which the appeal was preferred by
the concerned appellant - Writ petitions filed by the appellants -
Dismissed by the High Court relying on the decision of the
co-ordinate bench in Ankamma Trading case - On appeal, held:
First proviso in s.19 of 1957 Act and s.31 of AP VAT Act, as the
case may be, pertains to limitation period "for filing" of an appeal
and discretion of the Appellate Authority to condone the delay in
filing such appeal, up to a maximum period specified therein -
Second proviso though part of the same section, is an independent
condition mandating the appellant to produce proof of payment of
tax dues in respect of which the appeal is preferred - Even the
High Court in Ankamma Trading Company had justly noted that the
said proviso does not provide for any specific period within which
the tax dues should be paid - There is no express stipulation to
deposit the tax dues in respect of which the appeal is preferred, at
the time of its filing, institution or presentation as such - In the
absence of such clear stipulation, it is open to the assessee to file
the appeal within the statutory period of limitation provided
therefor and later on, deposit the specified tax dues but before the
appeal is taken up for consideration by the Appellate Authority for
the first time, be it for condonation of delay in filing the appeal
and/or to admit it on merits or otherwise -Proof of such payment
[2019] 9 S.C.R. 94
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having been made could be produced thereat, failing which, the
Appellate Authority will have to reject the appeal on that count -
Filing, institution or presentation of appeal in the office of the
Appellate Authority is an independent event than the appeal being
taken up for consideration "for the first time"- It is possible that
some unscrupulous litigant (assessee) may file appeal within the
limitation period but keep it under defect so that the same does not
proceed for consideration before the Appellate Authority - To
obviate such mischief, the Appellate Authority shall take up every
singular appeal for consideration for admission on merits and/or
for condonation of delay in filing the appeal for the first time, no
later than 30 days from the date of its filing, institution or
presentation in its office - Direction be complied with by all
concerned meticulously, without any exception - Judgment of the
High Court set aside - Writ petitions allowed - Concerned appeals
stand restored to the file of the Appellate Authority and be
considered in accordance with law - AP VAT Act, 2005 - Second
Proviso to s.31 and Proviso to s.33(2) - Telangana State VAT Act,
2005 - Constitution of India - Art.136 - Doctrine of Merger -
Interpretation of Statutes.
Amdhra Pradesh General Sales Tax Act, 1957 - Power of the
Appellate Authority under 1957 and 2005 Act - Discussed - AP
VAT Act, 2005 - Telangana State VAT Act, 2005.
Practice & Procedure - Filing, institution or presentation of
appeal vis-a-vis the appeal being taken up for consideration -
Difference between - Explained.
Disposing of the appeals, the Court
HELD: 1.1 The first proviso in the concerned Section
(Section 19 and Section 31, as the case may be) pertains to
limitation period "for filing" of an appeal; and discretion of the
Appellate Authority to condone the delay in filing of such appeal,
up to a maximum period specified therein. Indeed, the second
proviso is part of the same Section. However, it is an
independent condition and in one sense, mutually exclusive
condition mandating or enjoi

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M/S. S.E. GRAPHITES PRIVATE LIMITED
v.
STATE OF TELANGANA & ORS.
 (Civil Appeal No.7574 of 2014)
JULY 10, 2019
[A.M. KHANWILKAR AND AJAY RASTOGI, JJ.]
Andhra Pradesh General Sales Tax Act, 1957 - Proviso to
s.19 and s.21(2) - Appellate Authority rejected the appeals
preferred by the concerned appellants-assessees under the
provisions of 1957 Act or 2005 VAT Act of AP or Telangana, as the
case may be - Appeals were dismissed inter alia on the ground that
the appellants failed to comply with the pre-condition of producing
proof of payment of tax admitted to be due for the relevant
assessment year in respect of which the appeal was preferred by
the concerned appellant - Writ petitions filed by the appellants -
Dismissed by the High Court relying on the decision of the
co-ordinate bench in Ankamma Trading case - On appeal, held:
First proviso in s.19 of 1957 Act and s.31 of AP VAT Act, as the
case may be, pertains to limitation period "for filing" of an appeal
and discretion of the Appellate Authority to condone the delay in
filing such appeal, up to a maximum period specified therein -
Second proviso though part of the same section, is an independent
condition mandating the appellant to produce proof of payment of
tax dues in respect of which the appeal is preferred - Even the
High Court in Ankamma Trading Company had justly noted that the
said proviso does not provide for any specific period within which
the tax dues should be paid - There is no express stipulation to
deposit the tax dues in respect of which the appeal is preferred, at
the time of its filing, institution or presentation as such - In the
absence of such clear stipulation, it is open to the assessee to file
the appeal within the statutory period of limitation provided
therefor and later on, deposit the specified tax dues but before the
appeal is taken up for consideration by the Appellate Authority for
the first time, be it for condonation of delay in filing the appeal
and/or to admit it on merits or otherwise -Proof of such payment
[2019] 9 S.C.R. 94
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having been made could be produced thereat, failing which, the
Appellate Authority will have to reject the appeal on that count -
Filing, institution or presentation of appeal in the office of the
Appellate Authority is an independent event than the appeal being
taken up for consideration "for the first time"- It is possible that
some unscrupulous litigant (assessee) may file appeal within the
limitation period but keep it under defect so that the same does not
proceed for consideration before the Appellate Authority - To
obviate such mischief, the Appellate Authority shall take up every
singular appeal for consideration for admission on merits and/or
for condonation of delay in filing the appeal for the first time, no
later than 30 days from the date of its filing, institution or
presentation in its office - Direction be complied with by all
concerned meticulously, without any exception - Judgment of the
High Court set aside - Writ petitions allowed - Concerned appeals
stand restored to the file of the Appellate Authority and be
considered in accordance with law - AP VAT Act, 2005 - Second
Proviso to s.31 and Proviso to s.33(2) - Telangana State VAT Act,
2005 - Constitution of India - Art.136 - Doctrine of Merger -
Interpretation of Statutes.
Amdhra Pradesh General Sales Tax Act, 1957 - Power of the
Appellate Authority under 1957 and 2005 Act - Discussed - AP
VAT Act, 2005 - Telangana State VAT Act, 2005.
Practice & Procedure - Filing, institution or presentation of
appeal vis-a-vis the appeal being taken up for consideration -
Difference between - Explained.
Disposing of the appeals, the Court
HELD: 1.1 The first proviso in the concerned Section
(Section 19 and Section 31, as the case may be) pertains to
limitation period "for filing" of an appeal; and discretion of the
Appellate Authority to condone the delay in filing of such appeal,
up to a maximum period specified therein. Indeed, the second
proviso is part of the same Section. However, it is an
independent condition and in one sense, mutually exclusive
condition mandating or enjoining the appellant to produce proof
of payment of tax dues in respect of which the appeal is
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF
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preferred. That obligation can be discharged until the appeal is
considered for admission and/or condonation of delay in filing of
the appeal, as the case may be, by the Appellate Authority for the
first time. Even the High Court in Ankamma Trading Company
had justly noted that the said proviso does not provide for any
specific period within which the tax dues should be paid.
Moreover, there is no express stipulation to deposit the tax dues
in respect of which the appeal is preferred, at the time of its
filing, institution or presentation as such. In the absence of such
a clear stipulation, it must necessarily follow that it is open to the
assessee to file the appeal within the statutory period of
limitation provided therefor and later on, deposit the specified
tax dues but before the appeal is taken up for consideration by
the Appellate Authority for the first time - be it for condonation
of delay in filing the appeal and/or to admit it on merits or
otherwise. The proof of such payment having been made could
be produced thereat. Failing which, the Appellate Authority will
have no other option but to reject the appeal on that count. The
Appellate Authority has no power to extend the time to deposit
the specified tax dues. Suffice it to observe that, stricto sensu, the
said proviso is not a provision of pre-deposit at the stage of
filing, institution or presentation of the appeal as such; but is a
provision stipulating payment of tax dues as a pre-requisite or
sine qua non for consideration of appeal on merits or otherwise
and/or for condonation of delay in filing the same, as the case
may be, for the first time. It is also to impose fetter on the
Appellate Authority from admitting the appeal for consideration
on merits. It is well recognized that filing, institution or
presentation of appeal in the office of the Appellate Authority is
an independent event than the appeal being taken up for
consideration "for the first time" for being admitted on merits or
otherwise and/or for condonation of delay in filing it, as the case
may be. There is no reason to interpret the stated proviso in any
other manner lest, inevitably, it would result in re-writing the
same and entail in doing violence to the legislative intent.
Presumably, Supreme Court in M/s. Innovatives Systems, and other
decisions rendered following the same, therefore, was persuaded
to allow the appeal preferred by the assessee and to relegate the
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parties before the Appellate Authority for consideration of the
appeal for admission on merits. Concededly, Supreme Court was
conscious of the decision in Ankamma Trading Company. In that,
the judgment under challenge before it in the concerned appeal
was founded on the view already taken by the coordinate bench
of the same High Court [including in Ankamma Trading
Company]. It has been so recorded by Supreme Court. In that
sense, the legal position expounded in Ankamma Trading
Company, stood impliedly overruled, even though that decision
has not been adverted to or expressly overruled by Supreme
Court. Indeed, the decision of Supreme Court in M/s. Innovatives
Systems, is a brief judgment. That, however, would make no
difference. For, it is well established that once a special leave
petition has been granted, the doors for the exercise of appellate
jurisdiction of this Court have been let open. Resultantly, the
order impugned before the Supreme Court became an order
appealed against and any order passed thereafter would be an
appellate order and attract the doctrine of merger despite the
fact that the order is of reversal or of modification or of affirming
the order appealed against and including is a speaking or
non-speaking one. This legal position has been restated in
Kunhayammed. The argument of the respondent-State that the
decision of Supreme Court in M/s. Innovatives Systems, and other
decisions following the same, cannot be considered as binding
precedent is rejected. [Paras 8-11] [109-G-H; 110-A-H;
111-A-G]
1.2 The first proviso pertaining to maximum period of
delay to be condoned by the Appellate Authority, also uses the
expression "admit the appeal". That expression "admit",
however, must be read to mean filing, institution or presentation
of the appeal in the office of the Appellate Authority. Whereas,
the expression "admitted" used in the second proviso will have
to be construed as analogous to expression "entertained". The
setting in which the provisions under consideration appear leaves
no manner of doubt that it is ascribable to the event of taking up
the appeal for consideration, for the first time, to admit it on merits
or otherwise and/or for condonation of delay in filing the appeal,
as the case may be. Before that event occurs, it is open to the
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appellant to deposit the tax dues in respect of which the appeal is
preferred and produce proof of such deposit before the
Appellate Authority. This view is reinforced from the exposition
of Supreme Court in Ranjit Impex, wherein the view taken by the
Division Bench of the High Court of Madras that the proof of
deposit of tax has to be produced at the time when the appeal is
taken up for consideration, but not at the time of filing or
presentation of the appeal, has been upheld. Even the decision
of this Court in M/s. Lakshmi Rattan Engineering Works Ltd.,
heavily relied upon by the respondent-State, does not militate
against the view taken by us - that the true purport of the said
proviso is that the Appellate Authority shall proceed with the
consideration of appeal for admission for hearing on merits or
otherwise and/or for condonation of delay in filing appeal, as the
case may be, if the proof of payment of the specified tax dues
referred to in the said proviso is produced by the appellant on
the first date of such consideration of the appeal. [Paras 12-14]
[112-A-F]
1.3 In the appeals under consideration, admittedly, the
appellant-assessee had deposited the specified tax dues before
the date on which appeal preferred by them was taken up for
consideration for the first time for admission on merits. In such a
situation, the stated proviso becomes unavailable to reject the
appeal on the ground of institutional defect. In this view of the
matter, all these appeals must succeed. Taking advantage of the
interpretation given, it is possible that some unscrupulous
litigant (assessee) may file an appeal within the limitation period
but keep it under defect so that the same does not proceed for
consideration before the Appellate Authority. To obviate such a
mischief, it is directed that the Appellate Authority shall be obliged
to take up every singular appeal for consideration for admission
on merits and/or for condonation of delay in filing the appeal for
the first time, no later than thirty days from the date of its filing,
institution or presentation in the office of the Appellate
Authority. This direction shall be complied with by all concerned
meticulously, without any exception. That is the only way to
secure the interests of the Revenue and at the same time to
effectuate the purpose underlying the proviso regarding the
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deposit of specified amount of tax dues. Resultantly, the impugned
judgment of the High Court is set aside and instead the writ
petition(s) are allowed by setting aside the order passed by the
Appellate Authority, rejecting the concerned appeals on the
ground of non-compliance of the stated proviso of the provisions
under consideration. The concerned appeals shall stand restored
to the file of the Appellate Authority. The same shall proceed for
consideration in accordance with law. [Paras 16-18] [113-C-H;
114-A]
Civil Appeal Nos.4098/2016 & 4099/2016
1.4 In this set of appeals, admittedly, the appellant-assessee
deposited the amount after the appeal filed by them came to be
rejected by the Appellate Authority. In that sense, the appellantassessee failed to produce proof of payment of tax dues in respect
of which the appeal was preferred before the Appellate Authority
when their appeal was taken up for consideration for admission.
Resultantly, the deposit made after rejection of the appeal will be
of no avail to the appellant-assessee, in light of the mandate of
the stated proviso under consideration. In view of the above,
these appeals are dismissed. [Paras 19, 20] [114-B-D]
Civil Appeal No.8452/2016
1.5 If the appeal filed by the respondent is still pending
and has not been taken up for consideration so far by the Appellate
Authority, only then it would be open to the respondent to deposit
the requisite amount and produce the proof of such deposit before
the Appellate Authority. If, however, the appeal has already been
taken up for consideration for being admitted on merits or
otherwise and by that date the respondent had not deposited the
requisite amount as prescribed in terms of stated proviso, the
Appellate Authority would be well within its jurisdiction and rather
duty bound to reject the appeal on the ground of an institutional
defect. That is a matter to be considered by the Appellate
Authority. [Para 23] [115-C-E]
Civil Appeal No. 5343 of 2019
1.6 The impugned judgment is set aside and the parties
are relegated before the High Court for reconsideration of the
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Writ Petition No.837/2014 afresh on its own merits in accordance
with law and including in light of decision of this Court in Civil
Appeal No.7574/2014 decided today. All contentions available to
both sides in the remanded writ petition are left open to be
considered on its own merits and in accordance with law.
[Para 33] [119-A-B]
Civil Appeal No.10670/16
1.7 The parties are relegated before the High Court to
consider the same on its own merits, in accordance with law. All
questions and contentions, available to both sides, are left open
to be decided by the High Court on its own merits. The impugned
judgment of the High Court is set aside. [Paras 38, 39]
[121-D-E]
Civil Appeal No.3349/2018
1.8 In the present appeal, the appellant cannot be heard to
agitate the question already decided in Civil Appeal No.7574/
2014 as nothing has been brought to notice to show that the
appellant had deposited the specified tax dues, in respect of which
the appeal was filed, before the first date of consideration of the
appeal by the Appellate Authority. However, as the High Court
has dealt with merits of the challenge to the original order, in
exercise of writ jurisdiction and as no argument was advanced by
either party in that regard, this appeal is delinked and directed
that it be heard separately on the challenge to the original order
passed by the first Appellate Authority. Appeal to proceed
accordingly. [Paras 40, 41] [121-H; 122-A-B]
Ankamma Trading Company v. Appellate Deputy Commissioner (CT), Guntur & Anr. (2011) 44 VST 189 (AP);
M/s. IOT Infrastructure & Energy Services Ltd., Rep.
by its Deputy Manager (Accounts) v. State of Andhra
Pradesh Rep. by its Principal Secretary to Government
(Judgment of Supreme Court dated 14.12.2016 in
Civil Appeal No.12077/2016); M/s. Ranisati Trading
Co. Rep. by its Managing Partner v. Commercial Tax
Officer, Gajuwaka Circle, Visakhapatnam and Ors.
(Judgment of Supreme Court dated 17.04.2017 in
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Civil Appeal No.5339/2017); M/s. Lakshmi Rattan
Engineering Works Ltd. v. Asst. Commr. Sales Tax,
Kanpur & Anr. [1968] 1 SCR 505 ; Narayan Chandra
Ghosh v. UCO Bank and Ors (2011) 4 SCC 548 :
[2011] 3 SCR 1024 - referred to.
M/s. Innovatives Systems, Rep. by its Managing
Partner v. State of Andhra Pradesh, Rep. by Principal
Secretary to Government (Judgment of Supreme Court
dated 23.02.2015 in Civil Appeal No.2230/2015) ;
Kunhayammed and Ors. v. State of Kerala and Anr.
(2000) 6 SCC 359 : [2000] 1 Suppl. SCR 538;
Ranjit Impex v. Appellate Deputy Commissioner and Anr.
(2013) 10 SCC 655 - relied on.
Case Law Reference
(2011) 44 VST 189 (AP) referred to
Para 3
[2000] 1 Suppl. SCR 538 relied on
Para 3
(2013) 10 SCC 655
 relied on
Para 4
[1968] 1 SCR 505
 referred to
Para 6
[2011] 3 SCR 1024
 referred to
Para 6
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7574
of 2014
From the Judgment and Order dated 17.09.2013 of the High Court
of Judicature of Andhra Pradesh at Hyderabad in Writ Petition
No. 15384 of 2013
With
Civil Appeal Nos.10433 of 2014, 2084 of 2015, 4098, 4099, 8452,
10670 of 2016, 3349 of 2018, 5343 and 5345 of 2019.
B. Adinarayana Rao, Sr. Adv., Dr. M. V. K. Moorthy, R. Ayyam
Perumal, Hitendra Nath Rath, Yogesh Raavi, Vishnu Shankar Jain,
Ms. Surekha Raman, Purushottam Kumar Jha, Akhil A. Roy, Sahil Singh,
M/s. K J John And Co, Ms. Prerna Singh, Guntur Prabhakar, Prashant
Mathur, Ms. Shoba Ramamuoorthy, Sri Ram J. Thalapathy, Shilp Vinod,
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF
TELANGANA & ORS.
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Pushkin Rajkumar, P. Venkat Reddy, Prashant Tyagi, M/s. Venkat Palwai
Law Associates, S. Udaya Kumar Sagar, Naresh Kumar, D. Mahesh
Babu, Advs. for the parties.
The Judgment of the Court was delivered by
A.M. KHANWILKAR, J.
Civil Appeal Nos.7574/2014, 10433/2014, 2084/2015 and
Civil Appeal No.5345 of 2019
(Arising out of S.L.P. (C) No.6880 of 2019)
1. Leave granted in SLP (C) No.6880 of 2019.
2. These Civil Appeals emanate from the orders passed by the
Appellate Authority rejecting the appeal preferred by the concerned
appellant(s) under the provisions of APGST Act, 1957 or AP VAT Act,
2005 or Telangana State VAT Act, 2005, as the case may be, on the
ground that the appellant-assessee had failed to comply with the
pre-condition of producing proof of payment of tax admitted to be due or
of such installments as may have been granted and/or the proof of
payment of twelve and a half percent (12.5%) of the difference of the
tax assessed by the assessing authority and the tax admitted by the
appellant for the relevant assessment year in respect of which the
appeal has been preferred by the concerned appellant-assessee,
warranting rejection of the appeal in terms of the second proviso of
Section 19 and proviso of Section 21 (2) of the APGST Act, 1957 or
second proviso of Section 31 and proviso of Section 33 (2) of the AP
VAT Act, 2005. Similar position obtains regarding the provisions of
Telangana State enactments.
3. The High Court dismissed the writ petitions filed by the
concerned appellant following the decision of the coordinate bench of
the High Court in Ankamma Trading Company Vs. Appellate Deputy
Commissioner (CT), Guntur & Anr.1 and other decisions taking the
same view, despite the appellant pointing out to the High Court that the
decision in Ankamma Trading Company (supra) has been impliedly
overruled by the Supreme Court in M/s. Innovatives Systems, Rep. by
its Managing Partner Vs. State of Andhra Pradesh, Rep. by
Principal Secretary to Government2. In that case, this Court after
1(2011) 44 VST 189 (AP)
2Civil Appeal No.2230/2015 (arising out of SLP (C) No.1832/2015 decided on February
23, 2015).
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clearly noting that the High Court had relied upon the judgment and
order passed by the Division Bench of the same High Court [in
Ankamma Trading Company (supra)] to dismiss the writ petition preferred by the appellant, yet proceeded to allow the appeal filed by the
appellant therein by setting aside the decision of the High Court. The
appellant in that case had filed appeal within limitation period but
deposited the twelve and a half percent (12.5%) of the difference of the
tax assessed by the assessing authority in respect of which the appeal
was preferred after the expiry of the limitation period specified in the
first proviso of the concerned provision. This Court, nevertheless, held
that the appellant having deposited the stipulated amount of twelve and
a half percent (12.5%) as directed by the Appellate Deputy
Commissioner (CT), the High Court ought to have condoned the delay
in complying with the direction given by the Appellate Authority in that
regard and thus restored the appeal with a direction to the Appellate
Authority to decide the appeal on merits. Relying on the subsequent
decisions of this Court in M/s. IOT Infrastructure & Energy Services
Ltd., Rep. by its Deputy Manager (Accounts) Vs. State of Andhra
Pradesh Rep. by its Principal Secretary to Government3 and M/s.
Ranisati Trading Co. Rep. by its Managing Partner Vs.
Commercial Tax Officer, Gajuwaka Circle, Visakhapatnam and
Ors.4, it is urged by the appellant-assessee that the High Court ought
not to have disregarded those decisions on the specious ground that the
same cannot be treated as a binding precedent and purportedly having
been passed in exercise of plenary powers under Article 142 of the
Constitution of India. Inasmuch as, looking at the decision in M/s.
Innovatives Systems (supra) of this Court, there is hardly any doubt
that the effect of the said order is to impliedly overrule the principle
enunciated by the Division Bench of the High Court in Ankamma
Trading Company (supra) or other decisions following the same. For,
this Court had unmistakably shown inclination to apply its mind to the
merits of the said order before it having granted leave to appeal against
the same albeit it had disposed of the matter by a brief judgment. Thus,
additionally, the doctrine of merger would come into play as exposited in
Kunhayammed and Ors. Vs. State of Kerala and Anr.5, wherein a
three-Judge Bench of this Court opined that once a special leave
3 (Civil Appeal No.12077/2016 decided on 14.12.2016)
4 (Civil Appeal No.5339/2017 decided on 17.04.2017)
5 (2000) 6 SCC 359
M/S. S.E. GRAPHITES PRIVATE LIMITED v. STATE OF
TELANGANA & ORS. [A.M. KHANWILKAR, J.]
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petition has been granted, the doors of the appellate jurisdiction of this
Court have been let open and any order passed thereafter would be an
appellate order and would attract the applicability of doctrine of merger.
Further, it would not make a difference whether the order is one of
reversal or of modification or of dismissal, or of affirming the order
appealed against. It would also not make any difference if the order is a
speaking or a non-speaking one.
4. In addition, the appellant(s)-assessee(s) have relied on the
decisions of this Court in Ranjit Impex Vs. Appellate Deputy
Commissioner and Anr.6,which has had an occasion to deal with more
or less similar provision, if not identically worded, being Section 51 of the
Tamil Nadu VAT Act, 2006. Even there the provision contained
stipulation such as the proviso of the provisions under consideration
pertaining to State of Andhra Pradesh and State of Telangana. It is then
urged that even the Division Bench of the High Court in the case of
Ankamma Trading Company (supra), in paragraph 25 has taken note
of the fact that the proviso of the concerned section does not
specifically mention the time within which such proof of payment is to
be produced but then went on to rely on the first proviso dealing with the
period of limitation within which the appeal is required to be filed and the
maximum period of delay which could be condoned by the Appellate
Authority, to hold that the deposit specified in the second proviso should
also be paid within such time only. Else, it went on to hold that the
Appellate Authority is obliged to reject the appeal or in other words, not
admit the same.
5. The appellants would urge that there is well recognized
distinction between the factum of filing, institution and presentation of
the appeal and the factum of "entertaining" the appeal or consideration
thereof for admitting the same on merits. If the provision had expressly
stated that the "appeal when filed" should be "accompanied with" the
receipt or proof of payment of amount referred to in the second proviso,
the interpretation commended to the High Court could be sustained.
However, the High Court itself having recognized the fact that no
specific mention is made about the time within which such proof of
payment is to be produced, the corollary thereof is that the proof of
6(2013) 10 SCC 655
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payment is required to be produced by the assessee on the "first date of
hearing" of the appeal for admission or consideration thereof on merits.
The appellant has also relied on couple of reported decisions to contend
that the right of appeal, though, it does not inhere in the party, but once
such remedy is provided then it cannot be whittled down by giving strict
interpretation to the second proviso. However, the just approach would
be to read the expression "not to be admitted" as "not to be entertained"
- if the dealer failed to produce proof of payment of tax dues as per the
second proviso of the concerned provision. The thrust of the argument
is that in cases where the appellant-assessee has already paid the
requisite amount referred to in the second proviso of the concerned
provision, before the appeal is taken by the Appellate Authority/Court
for the "first time for consideration" after its filing in the office of the
Appellate Authority, that will be substantial compliance of the second
proviso. In such a case, the Appellate Authority would be obliged to
admit the appeal if it deserves consideration on merits and the appellantassessee cannot be non-suited on the ground that the amount so paid is
after the limitation period specified for filing of an appeal.
6. The respondent-State, on the other hand, has supported the
exposition in the case of Ankamma Trading Company (supra), and
would urge that the view taken in the said decision is the only possible
interpretation of the second proviso. In that, if the amount specified in
the second proviso is not deposited within the period provided for filing
an appeal and including for condonation of delay, such appeal would be
inflicted with institutional defect and will have to be rejected on that
count in light of the mandate contained in the proviso of the concerned
provision. It is urged that the appellants have been ill- advised to invoke
doctrine of merger. According to the respondent-State, on a bare
perusal of the decision of this Court in M/s. Innovatives Systems
(supra), and the other decisions passed following the same would clearly
indicate that it has been passed in the fact situation of the concerned
case. Notably, this Court has not interpreted the provisions under
consideration or for that matter explicitly overturned the principle
expounded by the Division Bench in Ankamma Trading Company
(supra). Whereas, a bare reading of the provision makes it amply clear
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that it is a mandatory provision. Failure to comply with the stipulation in
the second proviso would inevitably denude the Appellate Authority from
entertaining the same or so to speak, admitting the same on merits. Heavy
reliance has been placed on the decision in the case of M/s. Lakshmi
Rattan Engineering Works Ltd. Vs. Asst. Commr. Sales Tax, Kanpur
& Anr.7,wherein this Court was called upon to interpret Section 9 of the
relevant enactment. As per that provision, no appeal against an
assessment shall be entertained unless it is accompanied by satisfactory
proof of the payment of the tax amount admitted by the appellant to be
due. The exposition in this decision, according to the respondent-State,
would admit of no other interpretation of the second proviso as is held by
the Division Bench of the High Court in Ankamma Trading Company
(supra). In that, the Appellate Authority cannot exercise power to admit
the appeal beyond the statutory period and since the pre-deposit is
quintessence, the requirement of pre-deposit within the maximum
period of limitation for filing the appeal including, for condoning the
delay in filing the same, would have bearing on the second proviso of the
concerned provision. Reliance is also placed on the decision in Narayan
Chandra Ghosh Vs. UCO Bank and Ors.8, which has had an
occasion to interpret the purport of Section 18 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Securities
Interest Act, 2002 wherein the Court noted that there is an absolute
power to entertain an appeal under Section 18 of the Act unless the
condition precedent, as stipulated, is fulfilled. The respondent-State would,
thus, contend that the deposit even if made by the assessee before the
rejection of the appeal (for non-compliance of the pre-condition in terms
of the proviso of the concerned provision), will be of no avail to the
assessee.
7. We have heard the learned counsel for the parties. At the
outset, we deem it apposite to reproduce the relevant
provisions of the APGST Act, 1957 and AP VAT Act, 2005.
Almost identical provisions obtain in the Telangana State Acts. Section
19 and 21 of the APGST Act, 1957 and Section 31 and 33 of the AP
VAT Act, 2005, read thus:
7(1968) 1 SCR 505
8(2011) 4 SCC 548
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"APGST Act, 1957
A.P. VAT Act, 2005
Section 19. Appeals.-(1) Any
dealer objecting to any order
passed or proceeding recorded by
any authority under the provisions
of the Act other than an order
passed or proceeding recorded by
an Additional Commissioner or
Joint Commissioner, or Deputy
Commissioner under sub-section
(4C) of section 14 may within
thirty days from the date on which
the order or proceeding was
served on him, appeal to such
authority as may be prescribed:

Provided
that
the
appellate
authority may within a further
period of thirty days admit the
appeal preferred after a period of
thirty days if he is satisfied that
the dealer had sufficient cause for
not preferring the appeal within
that period:

Provided further that an appeal so
preferred shall not be admitted
by
the
appellate
authority
concerned
unless
the
dealer
produces proof of payment of
tax admitted to be due, or of such
instalments as have been granted,
and the proof of payment of
twelve and half per cent of the
difference of the tax assessed by
the assessing authority and the tax
admitted by the appellant, for the
relevant
assessment
year,
in
respect of which the appeal is
preferred.

31. Appeal to Appellate authority.-(1)
Any VAT dealer or TOT dealer or any
other dealer objecting to any order
passed or proceeding recorded by any
authority under the provisions of the
Act other than an order passed or
proceeding recorded by an Additional
Commissioner or Joint Commissioner
or Deputy Commissioner may, within
thirty days from the date of which the
order or proceeding was serve on him,
appeal to such authority as may be
prescribed:

Provided that the appellate authority
may within a further period of thirty
days admit the appeal preferred after a
period of thirty days if he is satisfied
that the VAT dealer or TOT dealer or
any other dealer had sufficient cause for
not preferring the appeal within that
period:

Provided further that an appeal so
preferred shall not be admitted by the
appellate authority concerned unless the
dealer produces proof of payment of
tax admitted to be due, or of such
instalments as have been granted, and
the proof of payment of twelve and half
per cent of the difference of the tax
assessed by the authority prescribed and
the tax admitted by the appellant, for
the relevant tax period, in respect of
which the appeal is preferred.

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21. Appeal to the Appellate
Tribunal.-(1) Any dealer objecting
to an order passed or proceeding
recorded-
(a) by any prescribed authority on
appeal under section 19, or
(b)
by
an
Additional
Commissioner
or
Joint
Commissioner
or
Deputy
Commissioner suo motu under
sub-section (4C) of section 14
or under sub-section (2) of
section 20, may appeal to the
Appellate
Tribunal
within
sixty days from the date on
which the order or proceeding
was served on him.

(2) The Appellate Tribunal may
within a further period of sixty
days admit the appeal after the
period of sixty days specified in
sub-section (1), if it is satisfied
that the dealer had sufficient cause
for not preferring the appeal with
that period.

Provided that no appeal against
the order passed under section 19
shall be admitted under subsection (1) or sub-section (2),
unless it is accompanied by
satisfactory proof of the payment
of fifty per cent of the tax as
ordered by the Appellate Deputy
Commissioner under section19:
33. Appeal to the Appellate
Tribunal.-(1) Any dealer objecting
to an order passed or proceeding
recorded-
(a) by any authority prescribed, on
appeal under section 31, or
(b)
by
the
Additional
Commissioner,
or
Joint
Commissioner
or
Deputy
Commissioner under section
21 or 32 or 38; or
(c) by any authority following the
ruling or order passed under
section 67;
May appeal to the Appellate
Tribunal within sixty days from
the date on which the order or
proceeding was served on him.

(2) The Appellate Tribunal may
within a further period of sixty
days admit the appeal preferred
after the period of sixty days
specified in sub-section (1), if it is
satisfied that the dealer had
sufficient cause for not preferring
the appeal within that period:

Provided that no appeal against
the order passed under section 31
shall be admitted under subsection (1) or sub-section (2) of
this
section
unless
it
is
accompanied by satisfactory proof
of the payment of fifty per cent of
the tax, penalty, interest or any
other amount as ordered by the
appellate authority under section
31."
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(emphasis supplied)
8. These provisions have been interpreted by the Division Bench
of the High Court in the case of Ankamma Trading Company (supra).
We are essentially concerned with the second proviso of Section 19 and
Section 31 of the respective enactment; and first proviso of Section
21(2) and Section 33(2) of the respective enactment. Upon reading the
Section under consideration as a whole, it is evident that the first proviso
in the concerned Section (Section 19 and Section 31, as the case may
be) pertains to limitation period "for filing" of an appeal; and discretion
of the Appellate Authority to condone the delay in filing of such appeal,
Provided further that no appeal
against the order passed under subsection (2) of section 20 shall be
admitted under sub-section (1) or subsection (2), unless it is accompanied
by satisfactory proof of the payment
of the tax admitted by the appellant to
be due or in such instalments thereof
as might have become payable as the
case may be, and twenty five per cent
of the difference of the tax ordered by
the revisional authority under subsection (2) of section 20 and the tax
admitted by the appellant:
Provided also that the assessing
authority shall refund the said amount
of twelve and half per cent or twenty
five per cent or fifty per cent of the
difference of tax assessed by the
assessing authority or revisional
authority as the case may be and the
tax admitted and paid by the
appellant,
with
simple
interest
calculated at the rate of 18 per cent
per annum if the refund is not made
within 60 days from the date of
receipt of the order passed under
section 19 or section 21.

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up to a maximum period specified therein. Indeed, the second proviso is
part of the same Section. However, it is an independent condition and in
one sense, mutually exclusive condition mandating or enjoining the
appellant to produce proof of payment of tax dues in respect of which
the appeal is preferred. That obligation, in our opinion, can be discharged
until the appeal is considered for admission and/or condonation of delay
in filing of the appeal, as the case may be, by the Appellate Authority for
the first time. We are inclined to take this view as even the High Court
in Ankamma Trading Company (supra) had justly noted that the said
proviso does not provide for any specific period within which the tax
dues should be paid. Moreover, there is no express stipulation to deposit
the tax dues in respect of which the appeal is preferred, at the time of its
filing, institution or presentation as such. In the absence of such a clear
stipulation, it must necessarily follow that it is open to the assessee to
file the appeal within the statutory period of limitation provided therefor
and later on, deposit the specified tax dues but before the appeal is taken
up for consideration by the Appellate Authority for the first time - be it
for condonation of delay in filing the appeal and/or to admit it on merits
or otherwise. The proof of such payment having been made could be
produced thereat. Failing which, the Appellate Authority will have no
other option but to reject the appeal on that count. The Appellate
Authority has no power to extend the time to deposit the specified tax
dues.
9. Suffice it to observe that, stricto sensu,the said proviso is not a
provision of pre-deposit at the stage of filing, institution or presentation
of the appeal as such; but is a provision stipulating payment of tax dues
as a pre-requisite or sine qua non for consideration of appeal on merits
or otherwise and/or for condonation of delay in filing the same, as the
case may be, for the first time. If we may say so, it is also to impose
fetter on the Appellate Authority from admitting the appeal for
consideration on merits. It is well recognized that filing, institution or
presentation of appeal in the office of the Appellate Authority is an
independent event than the appeal being taken up for consideration "for
the first time" for being admitted on merits or otherwise and/or for
condonation of delay in filing it, as the case may be. There is no reason
to interpret the stated proviso in any other manner lest, inevitably, it
would result in re-writing the same and entail in doing violence to the
legislative intent. Presumably, this Court in M/s. Innovatives Systems
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(supra), and other decisions rendered following the same, therefore, was
persuaded to allow the appeal preferred by the assessee and to relegate
the parties before the Appellate Authority for consideration of the
appeal for admission on merits.
10. Concededly, this Court was conscious of the decision in
Ankamma Trading Company (supra). In that, the judgment under
challenge before it in the concerned appeal was founded on the view
already taken by the coordinate bench of the same High Court
[including in Ankamma Trading Company (supra)]. It has been so
recorded by this Court. In that sense, the legal position expounded in
Ankamma Trading Company (supra), stood impliedly overruled, even
though that decision has not been adverted to or expressly overruled by
this Court.
11. The argument of the respondent proceeds that the decision in
M/s. Innovatives Systems (supra), neither refers to any specific
provision nor has it expressly over turned the decision of the Division
Bench of the High Court in Ankamma Trading Company (supra).
Thus, it cannot be considered as a binding precedent. We are not
impressed by this submission.