Supreme Court stays section 62(5) of Punjab VAT Act, 2005-No need to pre-deposit 25% for filing appeal

[AMIT BAJAJ ADVOCATE]

In a very important case namely Dishnet Wireless Ltd vs The Commercial Tax Officer SLP No. 37727/2013 and in WP(c) No. 69 of 2014 namely Amrit Banaspati Limited vs State of Punjab Supreme Court has granted stay on the operation and implementation of section 62(5) of Punjab VAT Act, 2005.

Section 62(5) of Punjab VAT Act, 2005 requires pre-deposit of 25 percent of additional demand before hearing any appeal under the Punjab VAT Act, 2005. This is a very harsh provision as it restricts the statutory right of appeal.

Section 62(5) of the Punjab VAT Act, 2005 is produced herebelow:

" No appleal shall be entertained, unless such appeal is accompanied by satisfactory proof of the prior minimum payment of twenty-five per cent of the total amount of additional demand, penalty and interest, if any.

Explanation:- For the purposes of this sub-section "additional demand" means any tax imposed as a result of any order passed under any of the provisions of this Act or the rules made thereunder or under the Central Sales Tax Act, 1956 (Act No. 74 of 1956)"

Supreme Court in the abovenoted case has made the following order:

"W.P. (C) 69 of 2014.

Issue notice, returnable on 7th March, 2014.

In the meantime, there shall be stay of operation andimplementation of sub-Section (5) of Section 62 of Punjab VAT Act, 2005."

After the above stay order of Supreme Court now there is no need to deposit 25 percent of additional demand before filing any appeal under Punjab VAT Act, 2005 and CST Act, 1956