Appeal on deposit of 10% total demand instead of 25% is allowed under PVAT : Punjab HC

IN THE HIGH COURT OF PUNJAB AND HARYANA

The Relevant Text of the Order as follows :

Heard the arguments of learned counsel for the parties. We have also perused the impugned orders as well as other documents on the file.

Admittedly, the first appeal was filed by the petitioner along with an application for waiving off pre-deposit amount of 25%. The 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. However, the petitioner did not comply with the directions. Thereafter, the VAT Appellate Tribunal also dismissed the appeal on the ground of non-depositing pre-deposit of 25% of the total demand. It was also directed to the petitioner to deposit 10% of the total demand within a period of two months but still that amount was not deposited. 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. It is not disputed that the Appellate Authority directed the petitioner to deposit 10% instead of 25% as pre-deposit for hearing of the appeal but the petitioner could not deposit the said amount as well. Now the petitioner is ready to deposit 10% of the total demand so that his appeal can be heard on merit.

Undisputedly, no relaxation can be given in view of ratio of judgment rendered in M/s Tecnimont Pvt. Ltd. case (supra) but the petitioner has to make out a case for financial hardship. Accordingly, 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, hence and as such, by exercising the inherent powers as provided under Section 226 of the Constitution of India and keeping in view the peculiar facts and circumstances of the case and by considering the financial hardship of the petitioner, we dispose of the petition 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.