2016 (4) TMI 619 - HC - VAT and Sales Tax

Interpretation of Section 62(5) of the Act - Waiver of pre-deposit - Engaged in import and trading of ferrous and non-ferrous metals and metal scrap - Held that - by applying the decision of this court in the case of Punjab State Power Corporation Limited v. The State of Punjab and others 2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT , the order passed by DETC (A) and Tribunal are set aside. - Appeal disposed of

Summary

Issues:
Interpretation of Section 62(5) of the Punjab Value Added Tax Act, 2005.

Analysis:
The appeal was filed by a dealer under Section 68 of the Punjab Value Added Tax Act, 2005 against the order passed by the Punjab Value Added Tax Tribunal. The appellant, engaged in import and trading of metals and metal scrap, had filed returns for the assessment year 2006-07 claiming Input Tax Credit. An assessment order was passed creating an additional demand after the expiry of the limitation period. The appellant appealed against this order, but the appeal was dismissed for non-deposit of 25% of the total demand. Subsequently, a complaint was filed against the appellant, leading to a closure report by the police. The appellant then appealed to the Tribunal, which upheld the order of the first appellate authority, leading to the present appeal before the High Court.

The main question in this case revolved around the interpretation of Section 62(5) of the Act. The High Court referred to a previous judgment in Punjab State Power Corporation Limited's case, where it was concluded that the first appellate authority has the power to grant interim protection or injunction under Section 62(5) of the PVAT Act. The Court held that the power to grant interim protection/injunction is embedded in the said section and can be exercised in deserving and appropriate cases where the purpose of the appeal would be frustrated by the pre-deposit condition. The Court emphasized that this power should not be exercised as a matter of routine and only in cases where a strong prima facie case is made out.

Based on the interpretation provided in the previous judgment, the High Court set aside the orders passed by the first appellate authority and the Tribunal. The matter was remanded back to the first appellate authority to decide on the application for interim protection/injunction in light of the legal principles outlined in the judgment. The present appeal was disposed of in accordance with the judgment in Punjab State Power Corporation Limited's case.

In conclusion, the High Court's judgment focused on the interpretation of Section 62(5) of the Punjab Value Added Tax Act, emphasizing the power of the first appellate authority to grant interim protection or injunction in deserving cases. The decision was based on a previous judgment, providing clarity on the application of the relevant statutory provisions in such matters.