2016 (3) TMI 980 - HC - VAT and Sales Tax

Sustainability of Tribunal order - Appeal dismissed for want of pre-deposit of 25% of the additional demand - Held that - the issue involved in this appeal stands concluded by the decision of this Court in Punjab State Power Corporation Limited v. The State of Punjab and others 2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT . Therefore, by following this, the orders passed by the Tribunal are set aside. - Appeal disposed of

Summary

Issues:
1. Appeal under section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Value Added Tax Tribunal for the assessment year 2007-08.
2. Whether the Tribunal should have waited for the outcome of a pending petition in the High Court.
3. Sustainability of the orders in view of the decision of the High Court on the vires of Section 62(5) of PVAT Act.

Issue 1:
The appellant, a registered dealer under the PVAT Act and the CST Act, filed quarterly returns and discharged tax liability for the assessment year 2007-08. The assessing authority created an additional demand of &8377;36,13,002/- and imposed a penalty under section 56 of the PVAT Act. The appellant appealed, seeking waiver of the pre-deposit requirement of 25%. The first appellate authority dismissed the appeal, as did the Tribunal. The appellant contended that the dismissal was improper, citing a decision involving the Punjab Power Corporation Limited. The High Court noted that the issue was previously decided in CWP No.26920 of 2013, where it was held that the first appellate authority has the power to grant interim protection by partially or completely waiving the pre-deposit condition under Section 62(5) of the PVAT Act. The Court emphasized that this power should be exercised judiciously and only in deserving cases. Consequently, the appeal was disposed of in line with the Punjab Power Corporation Limited case.

Issue 2:
The Court acknowledged that the issue in the present appeal had already been addressed in a previous judgment involving the Punjab Power Corporation Limited. In that case, it was established that the first appellate authority has the authority to grant interim protection by waiving the pre-deposit condition under Section 62(5) of the PVAT Act. The Court reiterated that this power should be exercised judiciously and only in cases where a strong prima facie case is presented. The judgment emphasized that the provisions of Section 62(5) are directory in nature, allowing the first appellate authority to waive the pre-deposit requirement in appropriate circumstances to prevent the appeal from being rendered nugatory. The Court directed that cases where the appeal was dismissed for lack of pre-deposit without considering the merits should be remitted to the first appellate authority for reconsideration in light of the legal principles outlined in the judgment.

Issue 3:
The appellant's counsel argued that the Tribunal's dismissal of the appeal due to non-compliance with the pre-deposit requirement was unjust. The Court, however, pointed out that the issue had already been settled in a previous case involving the Punjab Power Corporation Limited. In that judgment, it was clarified that the first appellate authority has the power to grant interim protection by waiving the pre-deposit condition under Section 62(5) of the PVAT Act. The Court emphasized that this power should be exercised judiciously and only in deserving cases where the purpose of the appeal would be frustrated by insisting on pre-deposit. Consequently, the Court disposed of the present appeal in line with the principles established in the Punjab Power Corporation Limited case.