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2020 (11) TMI 191 - HC - VAT and Sales TaxMaintainability of appeal - waiver of pre-deposit - appeal was dismissed by the Deputy Excise and Taxation Commissioner (Admin), Ludhiana Division, Ludhiana on the ground that the petitioner was directed to deposit 10% of the total demand instead of 25% under Section 62(5) of the PVAT Act by 21.03.2017 - HELD THAT - It was observed that the petitioner was having remedy under Article 226 of the Constitution of India for seeking any relaxation or waiving off the amount for hearing of the appeal. No doubt, any specific ground has not been taken for showing the financial hardship but it has been mentioned in second prayer that due to financial loss in business, the petitioner could not deposit the amount of 25% as pre-deposit. During the course of arguments, it has been submitted by learned counsel for the petitioner that the petitioner would deposit 10% of the total demand as directed by the Appellate Authority, in case, his appeal is heard on merits. Although, as per provisions of Section 62(5) of the PVAT Act, no appeal can be entertained unless the same is accompanied by satisfactory proof of the prior minimum payment of twenty-five percent of the total amount of additional demand created, penalty and interest, if any. By considering the interest of justice and also the fact that the petitioner is ready to deposit 10% as pre-deposit instead of 25% of the total demand before the Appellate Authority within some reasonable period for deciding his appeal on merits - petition disposed off by directing the petitioner to file an appeal within a period of two weeks from the date of receipt of certified copy of the order and respondent No.2 i.e the Deputy Excise and Taxation Commissioner (Admin), Ludhiana Division, Ludhiana is directed to entertain the appeal and to decide the same in accordance with law within a period of four weeks thereafter on depositing of 10% of the total demand.
Issues:
Assessment under PVAT Act, appeal process, pre-deposit requirement, financial hardship claim, interpretation of Section 62(5) of PVAT Act, judicial precedents on pre-deposit requirement. Assessment under PVAT Act: The petitioner firm, registered under PVAT Act and CST Act, received a notice for assessment under Section 29(2) of PVAT Act, leading to a demand of ?27,76,882. The firm deals in Iron and Steel goods. The firm filed appeals at various levels challenging the demand. Appeal Process and Pre-deposit Requirement: The petitioner filed appeals before the Deputy Excise and Taxation Commissioner and the Punjab VAT Tribunal, seeking exemption from the pre-deposit requirement of 25%. Despite being directed to deposit 10% of the total demand, the petitioner failed to comply, resulting in dismissal of the appeals. Financial Hardship Claim and Interpretation of Section 62(5) of PVAT Act: The petitioner claimed financial hardship as the reason for non-compliance with the pre-deposit requirement. The respondent argued that pre-deposit of 25% is mandatory under Section 62(5) of PVAT Act, citing judicial precedents to support their stance. Judicial Precedents on Pre-deposit Requirement: The petitioner relied on judgments of the Apex Court and the High Court to argue for a reduction in the pre-deposit amount based on merit. The respondent, however, emphasized the mandatory nature of the pre-deposit requirement and cited judgments supporting their position. Judgment: The Court noted that while the petitioner failed to comply with the pre-deposit directions, they were now willing to deposit 10% of the total demand for the appeal to be heard on merit. Considering the financial hardship claimed and the petitioner's readiness to make the deposit, the Court invoked its inherent powers under Article 226 of the Constitution of India. Decision: The Court directed the petitioner to file an appeal within two weeks and deposit 10% of the total demand. The Deputy Excise and Taxation Commissioner was instructed to entertain the appeal and decide it within four weeks, taking into account the financial hardship of the petitioner. The judgment balanced the legal requirement of pre-deposit with the petitioner's circumstances, ensuring justice and compliance with the law.
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