VATAP 31 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. VAT Appeal No.31 of 2009 Date of decision 20 .7.2009 State of Punjab and another ...Appellants Versus M/s Malwa Cotton Spinning Mills Ltd., Regd. ... Respondents CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JASWANT SINGH Present: Mr. P.K.Jain, Addl. AG Pb. for the appellants 1. Whether Reporters of local papers may be allowed to see the judgement ? 2. To be referred to the Reporter or not ? 3. Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The State of Punjab has challenged order dated 4.12.2008 (A.7) passed by the Value Added Tax Tribunal, Punjab, Chandigarh (for brevity 'the Tribunal') allowing the appeal of the Assessee- respondent. The Tribunal has set aside the order of the Deputy Excise and Taxation Commissioner (A) dismissing the appeal of the Assessee- appellant for non furnishing of proof of prior deposit of 25% of the amount for which demand has been raised by the revenue. Brief facts of the case may first be noticed. The Assistant Excise and Taxation Commissioner -cum Assessing authority framed the assessment in respect of the Assessee-respondent for the period 1.7.2002 to 31.3.2003 under Section 11 of the Punjab General Sales Tax Act, 1948 (for brevity 'the Act') vide order dated 18.9.2008 creating additional demand of tax and penalty (A.1). It is pertinent to notice that the assessment order was passed by the Assessing Authority after obtaining extension from VATAP 31 of 2009 2 the Excise and Taxation Commissioner as per the provisions of Section 11 (10) of the Act (A.2). The assessee- respondent filed an appeal under Section 20(1) of the Act before the Deputy Excise and Taxation Commissioner. Under Clause 5 of Section 20 of the Act it was required to deposit 25% of the additional demand as a condition precedent for entertainment of the appeal which was not deposited. An application for hearing of the appeal without deposit of 25% of the additional demand was made by the Assessee-respondent before the Deputy Excise and Taxation Commissioner although there is no provision for exemption either in the Act or the Rules framed thereunder. Accordingly, the Deputy Excise and Taxation Commissioner dismissed the appeal with the observation that there was no discretion to entertain the appeal without compliance with the provisions of Section 20(5) of the Act (A.3). The condition laid down in the order dated 24.10.2008 (A.3) was not complied with. The appeal of the respondent was dismissed by the Deputy Excise and Taxation Commissioner on 28.11.2008. The Assessee- respondent challenged the order dated 6.6.2008 granting extension for the finalization of the assessment by the assessing authority upto 31.3.2009 passed under Section 11(10) of the Act. Another appeal was also preferred by the Assessee- respondent under Section 20(2) of the Act against order dated 24.10.2008 passed by the Deputy Excise and Taxation Commissioner (Appeal) directing the Assessee respondent to deposit 25% of the additional demand. The Appeal against the order dated 6.6.2008 passed by the Excise and Taxation Commissioner, Punjab was accepted and the order granting extension was set aside by the Tribunal on 20.11.2008 (A.6). A perusal of the order shows that period of limitation to VATAP 31 of 2009 3 finalise the assessment had expired and no extension was available. The assessee- respondent also succeeded in the other appeal filed against the order of the Deputy Excise and Taxation Commissioner and the Tribunal vide its order dated 4.12.2008 set aside the order of the Assessing Authority on the ground that once the order of the Excise and Taxation Commissioner dated 6.6.2008 extending the period for framing assessment has already been set aside then the assessment order itself would not be sustainable. Mr. Piyush Kant Jain, learned State counsel has argued that the Tribunal has travelled beyond its jurisdiction in accepting the appeal of the Assessee- respondent in as much as sub section 5 of Section 20 of the Act is mandatory and no appeal could be entertained without deposit of 25% of the amount of penalty and tax. According to the learned counsel the order passed by the Deputy Excise and Taxation Commissioner (A) could not have been set aside. Having heard learned counsel for the appellants and perusing the record, we are of the considered view that the first appellate authority like Deputy Excise and Taxation Commissioner was not competent to entertain the appeal without compliance of mandatory provisions of Section 20(5) of the Act yet it is equally true that the order dated 6.6.2008 granting extended period of limitation was set aside by the Tribunal on 20.11.2008 (A.6).Therefore, the jurisdiction of the Assessing Officer to frame assessment is barred. In the facts and circumstances of this case, no useful purpose would be served by requiring the Assessee- respondent to first deposit 25% of the additional demand raised then get the appeal decided before the Deputy Excise and Taxation Commissioner and that it would be VATAP 31 of 2009 4 thereafter that the assessee- respondent was competent to file appeal. We do not feel impressed by such a logic in the argument of the learned Additional Advocate General. The appeal is wholly without substance and the same is accordingly dismissed. (M.M.Kumar) Judge (Jaswant Singh) 20.7.2009 Judge okg