2019 (5) TMI 1176 - HC - VAT and Sales Tax

Maintainability of appeal - non-compliance with the pre-deposit - Section 62(5) of Punjab VAT Act - HELD THAT - The Tribunal while dismissing the appeal of the appellant noticed that protection under Section 62(5) of the Act cannot be granted in each case but only in rare of the rarest cases where the impugned order is void and without jurisdiction and such deposit would frustrate the purposes of filing of appeal and that the appellant was suffering from any financial incapacity or was under any other hardship on account of poverty or insolvency - The law required the entertainment of appeal only when compliance under Section 62(5) was made. Therefore, the appellant was liable to comply with the provisions of Section 62(5) of the Act. Since the appellant failed to deposit 25% amount of the additional demand of the tax and interest only as directed by the DETC(A) and the Tribunal, the Tribunal had rightly dismissed the appeal on that account. In the present case, the appellant was required to pre-deposit 25% amount of the additional demand of the tax and interest only as a condition precedent for hearing of the appeal, which was reasonable and justified - No illegality or perversity could be pointed out by the learned counsel for the appellant in the findings recorded by the Tribunal which may warrant interference by this Court. No question of law arises in this appeal. Accordingly, finding no merit in the instant appeal, the same is hereby dismissed. Appeal dismissed - decided against appellant.

Issues Involved:
1. Appeal filed against order under Punjab Value Added Tax Act, 2005.
2. Justification of directing appellant to deposit 25% tax despite losses.
3. Reversal of Input Tax Credit on purchase tax and retention of bye products.
4. Dismissal of appeal for noncompliance with pre-deposit condition.
5. Legality of Tribunal's decision on dismissal of appeal.
6. Request for time extension for pre-deposit.

Analysis:
1. The appellant filed an appeal against an order under the Punjab Value Added Tax Act, 2005, raising substantial questions of law regarding the justification of directing the appellant to deposit 25% of the tax despite incurring losses, reversal of Input Tax Credit on purchase tax, and retention of bye products by the Rice Millers.

2. The Tribunal dismissed the appeal due to noncompliance with the pre-deposit condition under Section 62(5) of the Act. The Tribunal emphasized that the protection under this section can only be granted in rare cases where the impugned order is void or without jurisdiction, and the appellant is suffering from financial incapacity or hardship. Compliance with Section 62(5) was deemed necessary for appeal entertainment.

3. The appellant argued that the Tribunal was unjustified in dismissing the appeal for noncompliance with the pre-deposit condition. However, the Court found no merit in the appeal, stating that the pre-deposit requirement was reasonable and justified. The appellant was directed to comply with the provision to proceed with the appeal.

4. The Court noted that the appellant was required to pre-deposit 25% of the additional demand of tax and interest as a condition for hearing the appeal, which was deemed reasonable. No illegality or perversity was found in the Tribunal's decision, and no question of law was deemed to arise in the appeal.

5. Despite a request for time extension for pre-deposit, the Court granted two months for the appellant to make the required pre-deposit. If the appellant complies within the stipulated time, the appeal will be heard by the first Appellate Authority on merits as per the law.

6. An application for condonation of delay in filing the appeal was disposed of since the appeal had been dismissed on merits, requiring no further orders on the delay issue.

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