2016 (5) TMI 1191 - HC - VAT and Sales Tax

Whether both the authorities below were justified in dismissing the appeals of the appellant by holding the condition of pre-deposit of 25% as mandatory for the entertainment of appeal - Held that - the issue stands covered by 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 . Therefore by following the same, the order passed by the Deputy Excise and Taxation Commissioner (Appeals) and by the Tribunal are set aside. The matter is remanded back to the Deputy Excise and Taxation Commissioner (Appeals). - Appeal disposed of

Summary

Issues:
Appeal under Section 68 of Punjab Value Added Tax Act, 2005 against Tribunal's order on mandatory pre-deposit condition.

Analysis:
The appellant, a dealer engaged in Cotton Ginning and Rice Shelling, filed returns for the assessment year 2011-12 and claimed Input Tax Credit (ITC). An assessment order was issued creating additional demands, leading to an appeal before the Deputy Excise and Taxation Commissioner (Appeals) and subsequently to the Tribunal. The Tribunal upheld the dismissal by DETC(A) due to non-deposit of 25%. The appellant challenged the vires of Section 62(5) of the Act, which was previously upheld by the Court. The Court noted that the issue was concluded by a previous judgment in Punjab State Power Corporation Limited's case, emphasizing the power of the first appellate authority to grant interim protection. The Court held that the power to grant interim protection is embedded in Section 62(5) and can be exercised in deserving cases to prevent frustration of the appeal's purpose. The Court set aside the orders of DETC(A) and the Tribunal, remanding the matter to DETC(A) in line with the principles established in Punjab State Power Corporation Limited's case.

This judgment clarifies that the first appellate authority has the power to waive the pre-deposit condition in certain cases to prevent the appeal's purpose from being frustrated. It emphasizes that the power to grant interim protection is essential in the interest of justice and should be exercised judiciously. The judgment sets a precedent for cases where appeals were dismissed due to non-compliance with the pre-deposit condition, providing guidance on how such situations should be addressed by the first appellate authority. The decision ensures that the appeal process is fair and considers the circumstances of each case to prevent undue hardship on the appellant.