Case Law Details
Shiva TexFabs Ltd. Vs State of Punjab and ors. (Punjab and Haryana High Court)
The Punjab and Haryana High Court, in the case of M/s. Shiva TexFabs Ltd. v. State of Punjab and Ors. [CWP 2650 of 2022 dated October 3, 2023], demonstrated its power to alleviate financial hardship by reducing the pre-deposit amount required under the Punjab Value Added Tax Act. This landmark decision, dated October 3, 2023, highlights the court’s authority to modify pre-deposit conditions for tax appeals.
Hon’ble Punjab and Haryana High Court in above case reduced the amount of pre-deposit required under the Punjab Value Added Tax Act, 2005 (Punjab VAT Act) from twenty-five percent to ten percent due to financial hardship faced by the Petitioner thereby holding that, the High Court has inherent powers under Article 226 of the Constitution to waive or reduce the pre-deposit amount required at the time of filing the appeal.
Facts:
The Petitioner is engaged in the business of manufacturing and sale of yarn manufactured from PET bottles and is registered under the Punjab VAT Act. The Revenue Department (“the Petitioner”) inspected the office of the Petitioner and thereafter initiated assessment proceedings against the Petitioner under the Central Sales Tax Act by the issuance of a Show Cause Notice. The Respondent vide order dated June 25, 2018 (“the Order”) disallowed the ITC claimed by the Petitioner.
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