2018 (5) TMI 907 - HC - VAT and Sales Tax

Maintainability of appeal - failure to make pre-deposit - Whether on the facts and circumstances of the case the Ld. Tribunal was justified in dismissing the appeal of the appellant for failure to make pre deposit of 25% of tax demand without taking into cognizance the factual financial position of the appellant s company? - Held that - The financial condition of the appellant was not bad so as to grant it full protection from making compliance of Section 62(5) of the Act - Relying upon the judgment passed by this Court in Punjab State Power Corporation vs. State of Punjab and others 2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT it was concluded by the Tribunal that it was neither rarest of the rare case where further protection could be granted. The Tribunal rightly dismissed the appeal filed by the appellant - appeal dismissed.

Summary

Issues:
Delay in refilling the appeal condonation; Appeal under Section 68 of the PVAT Act; Pre-deposit of 25% of tax demand; Financial position of the appellant's company; Prima facie case of the appellant; Principles of natural justice; Excess amount with the department; Consistency of tribunal orders.

Analysis:
The appellant-assessee filed an appeal under Section 68 of the Punjab Value Added Tax Act, 2005 against the order of the Punjab VAT Tribunal. The appellant raised several substantial questions of law, including the justification of dismissing the appeal for failure to make a pre-deposit of 25% of the tax demand without considering the financial position of the company. The appellant also questioned the dismissal of the appeal by ignoring the main issue and the inconsistency between different tribunal orders. The appellant contended that the impugned order did not adhere to the legal principles established by the Hon'ble Court in a previous case.

The facts of the case revealed that the appellant, a government company engaged in food grain procurement, was assessed for additional tax, penalty, and interest. The first appellate authority directed the appellant to deposit 25% of the tax demand, which the appellant failed to comply with, leading to the dismissal of the appeal by the Tribunal. The Tribunal, relying on precedent, found that the appellant's financial condition did not warrant full protection from the pre-deposit requirement. The Tribunal concluded that the appeal was rightly dismissed, as the appellant failed to demonstrate any legal errors or inconsistencies in the tribunal's decision.

The High Court, after hearing the appellant's counsel, affirmed the Tribunal's decision, stating that no substantial question of law arose in the appeal. Consequently, the appeal was dismissed, along with the application for condonation of delay in filing the appeal. The Court found no grounds to overturn the Tribunal's decision, as the appellant failed to establish any illegality or perversity in the Tribunal's findings. Thus, the High Court upheld the dismissal of the appeal based on the established legal principles and factual circumstances of the case.