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2016 (2) TMI 613 - PUNJAB AND HARYANA HIGH COURT

2016 (2) TMI 613 - PUNJAB AND HARYANA HIGH COURT - [2016] 90 VST 138 (P&H) - Constitutional validity of requirement of mandatory pre-deposit of 25% without giving any discretion to the revisional authority to waive such deposit. - Section 65(3) of the Punjab Value Added Tax Act, 2005 (PVAT) - Held that:- provisions of Section 65(3) of PVAT Act are held to be intra vires, however, the Tribunal shall decide the matter in accordance with law in terms of the judgment in Punjab State Power Corporatio .....

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tra vires the Constitution of India being violative of Article 14 as it provides mandatory deposit of 25% tax, interest and penalty as a condition precedent for hearing of revision without giving any discretion to the revisional authority to waive such deposit. Further prayer has been made for quashing the demand notice dated 2.2.2015, Annexure P.10 directing the petitioner to deposit an amount of ₹ 5,13,09,680/-. 2. A few facts relevant for the decision of the controversy involved as narr .....

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tax payable under the Punjab Value Added Tax Act, 2005 (in short, the PVAT Act ) amounting to ₹ 94,51,58,556/- and ₹ 8,08,58,339/- under the Central Sales Tax Act, 1956 (in short, the CST Act ) was exempt from payment of tax in view of the provisions of the Punjab General Sales Tax (Deferment and Exemption) Rules, 1991 which was deducted out of the eligible amount available to the petitioner. In addition, an amount of ₹ 10,26,19,108/- was also deducted on account of tax calcula .....

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Act according to which the assessee was to maintain the account books only for the period of six years from the end of the financial year. On the expiry of the said period, the petitioner was of the belief that the entire proceedings had become final and no further action would be required in respect of assessment year 2006-07. On 7.10.2014, the petitioner received a notice whereby respondent No.2 initiated revisional proceedings under Section 65 of the PVAT Act read with Section 9(2) of the CS .....

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asked to show cause as to why penalty and interest be not imposed. The petitioner filed reply dated 18.11.2014 and the same day the order was reserved. On 21.11.2014, the petitioner filed Civil Writ Petition No.23873 of 2014 to challenge the revisional proceedings. Vide order dated 21.11.2014, Annexure P.2 this Court declined to interfere at that stage but granted liberty to raise all the pleas in appropriate proceedings in case any adverse order was passed. On 30.12.2014, the petitioner was ser .....

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ition under section 65(3) of the PVAT Act and stay of recovery. For the assessment year 2007-08, the petitioner had deposited an amount of ₹ 64,50,000/- and for the year 2010-11, it had deposited a sum of ₹ 4,95,81,836/-. In total, it had deposited a sum of ₹ 5,60,31,836/-. Vide order dated 17.7.2014, Annexure P.7, the DETC(Appeals) set aside all those orders and the matters were remitted back to the assessing authority. The petitioner approached the Tribunal against the order .....

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and Taxation Officer issued notice proposing to impose penalty and interest. The petitioner submitted reply dated 2.2.2015, Annexure P.9 stating that its revision before the Tribunal was pending. When the executive of the petitioner had attended the proceedings on 6.2.2015, he was again issued a demand notice dated 2.2.2015, Annexure P.10 directing the petitioner to deposit an amount of ₹ 5,13,09,680/-. Hence the instant writ petition to challenge the vires of section 65(3) of the PVAT Act .....

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ies that the issue involved in this appeal stands decided by this Court in CWP No.26920 of 2013 (Punjab State Power Corporation Limited vs. The State of Punjab and Others) vide order dated 23.12.2015, wherein after considering the relevant statutory provisions and the case law on the point interpreting Section 62(5) of the PVAT which is pari materia with Section 65(3) of PVAT Act, following conclusions were drawn:- 33. It is, thus, concluded that even when no express power has been conferred on .....

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first appellate authority. As a sequel, it would follow that the provisions of Section 62(5) of the PVAT Act are directory in nature meaning thereby that the first appellate authority is empowered to partially or completely waive the condition of pre-deposit contained therein in the given facts and circumstances. It is not to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. Only when a strong prima facie case is made out will the .....

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