The Hon’ble Punjab VAT Tribunal allows adjustment of pre-deposit u/s 62(5) of PVAT Act 2005 from refund amount applied of subsequent periods. It has been laid down that despite judgement of Hon’ble Supreme Court in Tecnimont case (which lays down that no waiver in respect of pre deposit can be given by appellate authorities), still statutory adjustments of ITC/refund are still available wrt pre-deposit.
FULL TEXT OF THE HIGH COURT ORDER/JUDGEMENT
Vide order dated 14.09.2021 Mr. A.S. Nanda ETO Jalandhar has sought time to submit a report if the amount of refund allowed for the assessment year 2012-13 could be permitted to adjustment towards pre deposit of 25% in accordance with law. No report has been submitted. The appeal u/s 62(1) of the PVAT Act has been dismissed on account of appellant having failed to make a pre deposit of 25% of the additional demand of Rs. 425690/- for the assessment year 2012-13. Vide order dated 14.09.2021 a report was sought from the ETO, Jalandhar whether the, amount of ITC allowed vide order dated 20.11.2019 could be adjusted against the amount of pre deposit required to be made u/s 62(5) of the PVAT Act, 2005.
It has been informed by State Counsel on the instructions of concerned ETO that the appellant had filed an application u/s 39 for refund/adjustment of ITC available against the amount of pre deposit u/s 62(5), the application has not been finally decided.
Mr. Daldeep Singh Sukarchakia DAG Punjab has submitted that this case pertains to assessment year 2012-13 and as per the judgement of Hon’ble Supreme Court in M/s Tecnimont Pvt.ltd. Vs State of Punjab (2019)69 GSTR 193 SC, decided on 18.9.2019, the appellant will not be permitted to waiver of pre deposit u/s 62(5).
I have, heard counsel for both the Parties and I am of the opinion that in view of the Provision of Section 62(5) of the PVAT Act as amended, no waiver OR relaxation is permitted for pre deposit u/s 62(5) of the Act, However, the statutory provisions regarding adjustment of the ITC available while determining the output tax has nbt been considered and no bar has been created for application of Section 15 for adjusting the ITC towards the tax liability. The appellant in the present case failed to make a pre deposit approximately Rs.106423/-. The appellant has been held entitled to input tax credit to the extent of Rs.295553/-. It has been held in the M/s Surya Pharmaceutical Ltd. (2015) 1NTR423 (P&H) adjustment of excess ITC towards payment of pre deposit can be adjusted. Mr. Daldeep Singh Sukarcof the opinion hakia, DAG for the State has submitted that the benefit of ITC towards tax has already been given and at present there no excess benefit which could 11 given.
I have considered the said contention and I am of the opinion excess ITC available Ito the assessee can be considered as an amount of tax for adjustment towards the tax liability. As such the appellant is entitled to the adjustment of ITC avalable towards the amount of pre deposit. The appeal can be heard by adjusting the amount of ITC available as it is more than the amount of pre deposit. This order without prejudice to the decision. The applicant is not entitled to refund to the extent of liability of tax, pending application u/s 39 of the PVAT Act. The appealiis ordered to be heard. The impugned order is set aside for above said reasons. It is ordered that the appeal No. 2019 of 2019-20 PVAT will be taken up by the First Appellate Authority on merits in the month of April, 2022 and would be finally disposed of preferably in the period of three months.