The main legal point established in the judgment is the authority of the first appellate authority to waive the condition of pre-deposit in cases of undue hardship, as provided in Section 62(5) of the PVAT Act.

Ajay Kumar Mittal, J.

1. Prayer in this petition is for declaring the provisions of Section 62(5) of the Punjab Value Added Tax Act, 2005 (in short, the PVAT Act”) to be ultravires the Constitution of India being violative of Article 14 as it provides mandatory deposit of 25% tax, interest and penalty as a condition precedent for hearing of appeal without giving any discretion to the appellate authority to waive such deposit. Further prayer has been made for quashing the orders dated 19.12.2012, 29.11.2013 and 12.2.2015, Annexures P.1, P.3, P.3/A, P.5 and P.6 respectively.

2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. The petitioner is a dealer duly registered under the provisions of the PVAT Act as well as the Central Sales Tax Act, 1956 (in short, “the CST Act”). It is engaged in the business of running a rice mill at Faridkot. It is an exempted unit having been granted exemption from 10.12.1999 to 9.12.2009. The petitioner had an unutilised exemption of Rs.68,84,716/- as on 1.4.2005. For the assessment year 200809, the petitioner was entitled to exemption upto 9.12.2009 whereafter it was liable to pay tax as a normal dealer. Assessment proceedings were initiated under Section 29(2) of the PVAT Act. The Assessing authority observed that since the dealer had failed to export 25% of its turnover outside the country during the year in question, it was liable to pay tax on its entire turnover. The Assessing authority framed assessment raising a demand of Rs.10,09,687/- under the PVAT Act followed by another demand amounting to Rs.5,99,542/- under the Punjab Infrastructure (Development and Regulation) Act, 2002. Aggrieved by the order, the petitioner filed appeals before the first appellate authority i.e. Deputy Excise and Taxation Commissioner (Appeals) [DETC] alongwith applications for entertainment of appeals without insisting upon 25% of the prior deposit as required under section 62(5) of the PVAT Act. Vide orders dated 29.11.2013, Annexures P.3 and P.3/A, the appeals were dismissed without giving any time to the petitioner to deposit the payment of 25%. The petitioner filed appeals before the Tribunal. Vide orders dated 12.2.2015, Annexures P.5 and P.6, the Tribunal dismissed the appeals. Hence the instant petition by the petitioner.

3. We have heard learned counsel for the parties.

4. It is not disputed by the learned counsel for the parties that the issue involved in this appeal stands decided by this Court in CWP No.26920 of 2013 (Punjab State Power Corporation Limited vs. The State of Punjab and Others) vide order dated 23.12.2015, wherein after considering the relevant statutory provisions and the case law on the point, following conclusions were drawn:

“33. It is, thus, concluded that even when no express power has been conferred on the first appellate authority to pass an order of interim injunction/protection, in our opinion, by necessary implication and intendment in view of various pronouncements and legal proposition expounded above and in the interest of justice, it would essentially be held that the power to grant interim injunction/protection is embedded in Section 62(5) of the PVAT Act. Instead of rushing to the High Court under Article 226 of the Constitution of India, the grievance can be remedied at the stage of first appellate authority. As a sequel, it would follow that the provisions of Section 62(5) of the PVAT Act are directory in nature meaning thereby that the first appellate authority is empowered to partially or completely waive the condition of pre-deposit contained therein in the given facts and circumstances. It is not to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue laws. Only when a strong prima facie case is made out will the first appellate authority consider whether to grant interim protection/injunction or not. Partial or complete waiver will be granted on