2009 (7) TMI 1155 - HC - VAT and Sales Tax

Non-furnishing of proof of prior deposit of 25 per cent of the amount - Held that - The argument of the counsel for the assessee-respondent is meritorious. It may be true that the first appellate authority like the Deputy Excise and Taxation Commissioner was not competent to entertain the appeal without compliance with mandatory provisions of section 20(5) of the Act yet it is equally true that the order dated June 6 2008 granting extended period of limitation was set aside by the Tribunal on November 20 2008 (A6). In the facts and circumstances of this case no useful purpose would be served by requiring the assesseerespondent to first deposit 25 per cent of the additional demand raised and then get the appeal decided before the Deputy Excise and Taxation Commissioner. It would only be thereafter that the assessee-respondent would be able to file appeal. We do not feel impressed by such a logic. The appeal is wholly without substance and the same is accordingly dismissed.

Summary

The High Court of Punjab and Haryana, in the case of Kumar M.M. and Jaswant Singh, JJ., addressed a challenge by the State of Punjab against an order passed by the Value Added Tax Tribunal. The Tribunal had allowed an appeal by the assessee-respondent and set aside the order of the Deputy Excise and Taxation Commissioner dismissing the appeal due to non-furnishing of proof of prior deposit of 25% of the amount for which demand was raised by the Revenue. The Tribunal's decision was based on the expiration of the limitation period for finalizing the assessment, rendering the assessment order unsustainable. The State argued that the Tribunal overstepped its jurisdiction by accepting the appeal without the mandatory 25% deposit. Conversely, the assessee-respondent contended that the assessment order was void ab initio due to the Tribunal setting aside the extended period of limitation. After considering both arguments, the Court agreed with the assessee-respondent, concluding that insisting on the 25% deposit before hearing the appeal was unnecessary given the circumstances. Therefore, the Court dismissed the appeal, finding it to be without substance.