The Supreme Court has decided to examine the plea of Punjab government pertaining to the provision of its VAT law which according to the government provides no exemption to the assessees from the mandatory deposit of 25% of the tax, penalty and interest for entertaining their appeal by the appellate authority.
“It appears that the high court did not considered the provision of section 62(5) of Punjab Value Added Tax Act, 2005”, said a bench comprising Justice SH Kapadia and Justice Swatanter Kumar while issuing notice to Femina Jewellery Pvt Ltd. The high court allowing the writ petition of Femina had directed that the appeal of the petitioner shall be entertained by the appellate authority without pre-deposit of 25% of the amount assessed by the authority.
That is great news. The rationale behind pre-deposit of 25% of demand u/s 62(5) of PVAT Act before the appeal is accepted must be examined by the Supreme Court.
In most of the cases in VAT act, the audit done by the department is below standard resulting in unnecessary demands for which appealant has to deposit 25% as a pre requsit to appeal. In most of the cases, it is unproductive exercise, causing sever national loss in the shape of blocked working capital and passing through the unnecessary process of appeal and other legal process. There is no responsibility fixed on the department official for not applying their mind properly in conductive audit and assessment. It is the time, the Govt should think towards generating revenue through development rather than harassing and extorting the business organisation.
it is the high time that the law maker does not allow to go in the merit of the case and do not allow to the legs on which demand stand up but just they want for pre deposit of tax / interest / penalty which is equal to deny the justice