Excess ITC can be utilised for payment of 25% of additional demand u/s 62(5) of PVAT Act 2005

I have written an article earlier explaining the provisions of section 15(3) of Punjab VAT Act 2005. Section 15 of Punjab VAT Act deals with the Net Tax Payable by a taxable person. According to section 15(3) excess ITC after adjustment u/s 15(2) shall be adjusted against any outstanding tax, penalty or interest under this Act or under the Central Sales Tax Act, 1956, as the case may be.

Thus not only penalties but also any outstanding Tax or interest can be adjusted from the Excess ITC. Now the Punjab VAT Tribunal has confirmed in Ganesh Iron and General Store, Killinwari (muktsar) Vs. State of Punjab decided on 18-05-2009 [(2010) 14 STM 486 (PVAT-Tri.)] that excess ITC can also be utilised for payment of additional demand which is pre condition for hearing appeal.

Thus if a person wants to file an appeal under Punjab VAT Act 2005 for which he is required to deposit 25% of additional demand u/s 62(5) as a pre condition for hearing of appeal, he can adjust such 25% of demand from the excess ITC if available and produce a certificate to that effect from the ETO cum Designated officer before the appealent authority to satisfy the conditions of section 62(5) of PVAT Act 2005


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