2016 (5) TMI 647 - HC - VAT and Sales Tax

Interpretation and validity of Section 62(5) of the Act - against revisional order passed by the Commissioner, revision is maintainable under Section 65(2) of the Act. Further subsection (3) of Section 65 of the Act which is pari materia to Section 62 (5) of the Act provides for mandatory pre-deposit before entertaining of revision by the Tribunal. Sub-sections (2) and (3) of Section 65 of the Act - Held that - after considering the relevant statutory provisions and the case law on the point, in view of the provisions of Section 65(3) of PVAT Act which were held to be intra vires as per decision of Hon ble Punjab & Haryana High Court in the case of M/s Ambuja Cements Limited vs. The State of Punjab and Others 2016 (2) TMI 613 - PUNJAB AND HARYANA HIGH COURT with the rider that the first appellate authority may grant interim protection qua partial or complete waiver of condition of pre-deposit in deserving cases, the present petition is disposed of.

Summary

Issues involved:
Interpretation and validity of Section 62(5) of the Punjab Value Added Tax Act, 2005.
Applicability of mandatory pre-deposit before entertaining revision under Section 65(3) of the Act.

Analysis of the judgment:
1. Interpretation and validity of Section 62(5) of the Act:
The court referred to a previous judgment in CWP No.26920 of 2013 where the validity of Section 62(5) was discussed. The court upheld the provision and concluded that the first appellate authority has the power to grant interim protection against the condition of pre-deposit. It was emphasized that the power to grant interim protection/injunction is embedded in Section 62(5) and can be exercised in deserving and appropriate cases. The court clarified that the provision is directory in nature and should be used judiciously by the first appellate authority. The judgment provided detailed guidelines on when the condition of pre-deposit can be waived, ensuring that the purpose of the appeal is not frustrated.

2. Applicability of mandatory pre-deposit under Section 65(3) of the Act:
The court discussed the provisions of Section 65(3) which require a minimum payment of twenty-five percent of the total amount of tax, penalty, and interest for entertaining a revision application. Citing a previous judgment in CWP No.2184 of 2015, the court held that Section 65(3) is intra vires. The judgment highlighted that the first appellate authority has the discretion to grant interim protection by partially or completely waiving the pre-deposit condition in deserving cases. The court reiterated that the power to grant interim protection should be exercised judiciously to prevent undue hardship to the appellant.

In conclusion, the court disposed of the petitions in line with previous judgments, emphasizing the importance of the first appellate authority's role in granting interim protection against pre-deposit conditions. The judgments provided a clear framework for the application of these provisions, ensuring fairness and justice in tax-related appeals and revisions.