2019 (7) TMI 1288 - HC - VAT and Sales Tax

Waiver of pre-deposit - excess Input Tax Credit on Purchase Tax - reassessment order (A-2) was challenged on the ground that it was without jurisdiction as the basis for amendment of assessment does not fall under the purview of re-assessment as provided under Section 29(7) of the Punjab VAT Act - HELD THAT - The issue involved in this appeal stands settled by a Division Bench of this Court M/s Punjab State Civil Supplies Corporation, Amritsar v State of Punjab and another 2019 (6) TMI 492 - PUNJAB AND HARYANA HIGH COURT wherein it was held that as per Section 62 (5) of the Punjab VAT Act, 2005, 25% of the tax amount has to be deposited for entertaining an appeal and that the First Appellate Authority has a power to waive off the precondition in appropriate cases . The condition of deposit of 25% of the tax amount was held to be reasonable and justified. No further adjudication in the matter is required - Appeal dismissed.

Summary

Issues:
Delay in refiling the appeal, assessment of excess ITC, waiver of pre-deposit under Punjab VAT Act, jurisdiction of reassessment, challenge of reassessment order, deposit requirement for entertaining an appeal.

Delay in Refiling the Appeal:
The judgment addresses delays in refiling the appeal, with a 47-day delay and a subsequent 5-day delay. The court allows the condonation of both delays, considering them insignificant, and allows the applications seeking condonation of the delays.

Assessment of Excess ITC:
The appellant, a Punjab Government agency engaged in food grain procurement, faced an assessment resulting in an excess Input Tax Credit (ITC) demand. The demand was raised due to the reversal of ITC accrued on Purchase Tax under the Punjab VAT Act on bye-products retained by millers during rice milling.

Waiver of Pre-Deposit under Punjab VAT Act:
The appellant filed an appeal challenging the reassessment order and insisted on the waiver of pre-deposit as required under Section 62(5) of the Punjab VAT Act. The 1st Appellate Authority directed the appellant to deposit 25% of the tax amount, which was challenged before the Punjab VAT Tribunal due to financial hardship faced by the appellant.

Jurisdiction of Reassessment and Challenge of Reassessment Order:
The reassessment order was challenged on the grounds of jurisdiction, contending that the basis for amendment did not fall under the purview of reassessment as provided under Section 29(7) of the Punjab VAT Act. Additionally, issues of interest, penalty, and tax were also challenged.

Deposit Requirement for Entertaining an Appeal:
During the hearing, the appellant's counsel conceded that the issue was settled by a Division Bench judgment, stating that 25% of the tax amount must be deposited for entertaining an appeal under Section 62(5) of the Punjab VAT Act. The court affirmed the requirement of the deposit and the First Appellate Authority's power to waive it off in appropriate cases, leading to the dismissal of the appeal.

In conclusion, the judgment addresses various issues related to delays in refiling the appeal, assessment of excess ITC, waiver of pre-deposit under the Punjab VAT Act, jurisdiction of reassessment, challenge of reassessment order, and the deposit requirement for entertaining an appeal. The court allows the condonation of delays, upholds the deposit requirement for appeals, and dismisses the appeal based on settled legal principles established in previous judgments.