G. Khanna & Company Vs Union of India (Bombay High Court)
The Bombay High Court considered a challenge to the order dated 19 September 2024 by which the Appellate Authority rejected the Petitioner’s appeal for alleged non-compliance with the mandatory requirement of pre-deposit of 10% of the tax amount.
The Appellate Authority had calculated 10% of the tax amount at approximately Rs.12,76,000/-, while the Petitioner had deposited Rs.8.62 lakhs. The Petitioner contended that there was no short deposit. In the alternative, relying upon JEM Exporter Vs Union of India and D N Polymers Vs Union of India & ors, the Petitioner submitted that the appeal could not have been rejected without an opportunity to establish that there was no shortfall or, if there was one, to make good the same.
The Respondents contended that the Petitioner had been personally heard by the Appellate Authority and that the 10% pre-deposit was mandatory. According to the Respondents, there was a genuine short deposit and no error had been committed in rejecting the appeal.
The High Court distinguished between a hearing on the merits of an appeal and an opportunity to respond to the separate ground on which the appeal was ultimately rejected. It found that the Petitioner had been heard on the merits, but had not been given notice that the appeal would be dismissed on the ground of alleged short deposit. Consequently, the Petitioner had no opportunity to establish that there was no shortfall or, alternatively, to cure the procedural deficiency.
