Section 62(5) of the PVAT Act 2005 provides for the precondition of deposit of 25% of total amount of tax, penalty and interest , if any before entertaining any appeal. Such condition was also imposed evan on those appealent whose entire goods are detained by the department u/s 51 evan if the value of such detained goods exceed the total amount of tax, penality, interest. In such cases it results in burdening the assessee with another liability.
The Honourable Punjab and Haryana High court in Femina Jewellery Pvt. Ltd. Vs. State of Punjab decided on 05-08-2009 reported in (2010)14 STM (JS) 30 has decided that where the valuable goods stand already detained and if in such a situation, the petitioner firm is insisted upon to make pre-deposit of 25% of the amount of tax assessed before filing of the appeal it would mean burdening it with another liability. The Gold Jewellery being worth more than four times the requirement of the provision is deemed to be compiled with.
The relevent part of the judgement is reproduced herebelow:
The Honourable Punjab and Haryana High court in Femina Jewellery Pvt. Ltd. Vs. State of Punjab decided on 05-08-2009 reported in (2010)14 STM (JS) 30 has decided that where the valuable goods stand already detained and if in such a situation, the petitioner firm is insisted upon to make pre-deposit of 25% of the amount of tax assessed before filing of the appeal it would mean burdening it with another liability. The Gold Jewellery being worth more than four times the requirement of the provision is deemed to be compiled with.
The relevent part of the judgement is reproduced herebelow:
Having heard the learned counsel for the parties at some length
and perusing the paper book with their able assistance, we find merit in the
submissions made by the learned counsel for the petitioner firm. It is
admitted position that the entire goods of the value of Rs. 2,98,850/- have
been detained by the respondents and are lying in their custody whereas the
tax assessed is Rs. 1,58,139/- which is far less than the value of the goods
detained. At the rate of 25% the amount of tax, penalty etc. would be less
than Rs. 40,000/- whereas the jewellery worth Rs. 2,98,850/- is lying in
custody. The valuable goods stand already detained. If in such a situation,
the petitioner firm is insisted upon to make pre- deposit of 25% of the
amount of tax assessed before filing of the appeal it would mean burdening
it with another liability. The gold jewellery being worth more than four
times the requirement of the provision is deemed to be complied with.
In the facts and circumstances of the case, we allow the writ
petitions and direct the respondents that the condition of pre-deposit of
25% of the total tax assessed shall not be insisted upon in the case of the
petitioner firm. The appeal filed by the petitioner firm shall be entertained
by the Appellate Authority without any pre-deposit of 25% of the amount
assessed and decided on merit.
and perusing the paper book with their able assistance, we find merit in the
submissions made by the learned counsel for the petitioner firm. It is
admitted position that the entire goods of the value of Rs. 2,98,850/- have
been detained by the respondents and are lying in their custody whereas the
tax assessed is Rs. 1,58,139/- which is far less than the value of the goods
detained. At the rate of 25% the amount of tax, penalty etc. would be less
than Rs. 40,000/- whereas the jewellery worth Rs. 2,98,850/- is lying in
custody. The valuable goods stand already detained. If in such a situation,
the petitioner firm is insisted upon to make pre- deposit of 25% of the
amount of tax assessed before filing of the appeal it would mean burdening
it with another liability. The gold jewellery being worth more than four
times the requirement of the provision is deemed to be complied with.
In the facts and circumstances of the case, we allow the writ
petitions and direct the respondents that the condition of pre-deposit of
25% of the total tax assessed shall not be insisted upon in the case of the
petitioner firm. The appeal filed by the petitioner firm shall be entertained
by the Appellate Authority without any pre-deposit of 25% of the amount
assessed and decided on merit.
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