Tecnimont Pvt. Ltd. Vs State of Punjab & Others (Supreme Court of India)
The Supreme Court considered appeals challenging the judgment of the Punjab and Haryana High Court concerning the constitutional validity of Section 62(5) of the Punjab Value Added Tax Act, 2005 (PVAT Act). The provision requires an appellant to furnish satisfactory proof of prior payment of 25% of the total additional demand, penalty and interest before a first appeal can be entertained. The High Court had framed three issues: whether the State was competent to enact Section 62(5), whether the requirement of a 25% pre-deposit was onerous and violative of Article 14 of the Constitution, and whether the first appellate authority possessed inherent power to waive or relax the requirement in deserving cases.
The lead matter before the High Court arose from assessments made under the PVAT Act against Punjab State Power Corporation Limited for assessment years 2007-08, 2008-09 and 2009-10. The assessing authority raised demands by taxing meter rent and service line rental and also imposed penalty and interest. Appeals filed before the appellate authority were accompanied by applications seeking waiver of the statutory pre-deposit on the ground of financial hardship. The appellate authority directed payment of 25% of the additional demand, failing which the appeals would be dismissed. Subsequent proceedings before the Tribunal and the High Court ultimately led to a challenge to the constitutional validity of Section 62(5).
