2009 (8) TMI 1108 - HC - VAT and Sales Tax

Provisions of section 62(5) of the Punjab Value Added Tax Act, 2005 - whether unconstitutional and ultra vires to the Constitution being illegal and arbitrary to the extent that there is no provision for exemption of prior deposit of 25 per cent for filing the appeal by those persons/dealers whose entire goods are lying in the custody of the Department Held that - It is admitted position that the entire goods of the value of ₹ 2,98,850 have been detained by the respondents and are lying in their custody whereas the tax assessed is ₹ 1,58,139 which is far less than the value of the goods detained. At the rate of 25 per cent the amount of tax, penalty, etc., would be less than ₹ 40,000 whereas the jewellery worth ₹ 2,98,850 is lying in custody. The valuable goods stand already detained. If in such a situation, the petitioner-firm is insisted upon to make pre-deposit of 25 per cent of the amount of tax assessed before filing of the appeal it would mean burdening it with another liability. The gold jewellery being worth more than four times the requirement of the provision is deemed to be complied with. In the facts and circumstances of the case, we allow the writ petitions and direct the respondents that the condition of pre-deposit of 25 per cent of the total tax assessed shall not be insisted upon in the case of the petitioner-firm. The appeal filed by the petitioner-firm shall be entertained by the appellate authority without any pre-deposit of 25 per cent of the amount assessed and decided on merit.

Summary

The High Court of Punjab and Haryana delivered a judgment on Civil Writ Petition Nos. 4272 and 7315 of 2009. The issue at hand was the constitutionality of section 62(5) of the Punjab Value Added Tax Act, 2005, which required a 25% deposit for filing an appeal. The petitioner, a company from Delhi, had its goods detained by the Department. The petitioner argued that since their goods were already in custody, they should be exempt from the 25% deposit requirement. The court agreed, noting that the value of the detained goods far exceeded the 25% deposit amount. As a result, the court directed that the petitioner's appeal be entertained without the need for the 25% deposit. This judgment highlights the court's discretion to waive procedural requirements based on the specific circumstances of a case.