Punjab Value Added Tax Act, 2005:
s. 62(5) – First Appeal – Validity of s. 62(5) – Condition of 25% pre-deposit for hearing first appeal – Reasonableness of Held: State is empowered to enact s. 62(5) – Thus, s. 62(5) is legal and valid and the condition of 25% of pre-deposit is not onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India.
s. 62(5) – First Appeal – Condition of 25% pre-deposit for hearing first appeal – Power of appellate authority to grant relief against requirement of pre-deposit – Held: It cannot be said that the first appellate authority in its right to hear appeal has inherent powers to grant interim protection against imposition of such a condition for hearing of appeals on merits – First appellate authority is not empowered to partially or completely waive the condition of pre-deposit contained therein in the given facts and circumstances – Any such exercise would make the provision itself unworkable and render the statutory intendment nugatory – Thus, the view taken by the High Court as regards waiving of the condition of pre-deposit is set aside.
Dismissing the appeals filed by the assessees and allowing those filed by the State, the Court
HELD: 1.1 The High Court rightly held Section 62(5) of the Punjab Value Added Tax Act, 2005 to be legal and valid and that the condition of 25% of pre-deposit not to be onerous, harsh, unreasonable and violative of Article 14 of the Constitution of India. [Para 17][249-E]
1.2 In the instant case, the High Court found that the Appellate Authority would have implied power to grant such solace and for arriving at such conclusion reliance is placed on the decision of this Court in Kunhi. Kunhi undoubtedly laid down that an express grant of statutory power carries with it, by necessary implication, the authority to use all reasonable means to make such grant effective. But can such incidental or implied power be drawn and invoked to grant relief against requirement of predeposit when the statute in clear mandate says – no appeal be entertained unless 25% of the amount in question is deposited? Would not any such exercise make the mandate of the provision of pre-deposit nugatory and meaningless? [Para 18, 19][249-H; 250-A-B]
1.3 If the inherent power the existence of which is specifically acknowledged by provisions such as Section 151 of the CPC and Section 482 of the Cr.P.C. is to be read with the limitation that exercise of such power cannot be undertaken for doing that which is specifically prohibited, same limitation must be read into the scope and width of implied power of an appellate authority under a statute. In any case the principle laid down in Matajog Dobey case states with clarity that so long as there is no express inhibition, the implied power can extend to doing all such acts or employing such means as are reasonably necessary for such execution. The reliance on the principle laid down in Kunhi cannot go to the extent, as concluded by the High Court, of enabling the Appellate Authority to override the limitation prescribed by the statute and go against the requirement of predeposit. The High Court was clearly in error in holding that even when no express power has been conferred on the first appellate authority to pass an order of interim injunction/protection, by necessary implication and intendment in view of various pronouncements and legal proposition expounded 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. The first appellate authority is empowered to partially or completely waive the condition of pre-deposit contained therein in the given facts and circumstances. Therefore, the power to grant interim protection/injunction by the first appellate authority in appropriate cases in case of undue hardship is legal and valid. [Para 24, 6][238-F-G; 239-A, D; 254-B-D]
1.4 As stated in P. Laxmi Devi and Har Devi Asnani case, in genuine cases of hardship, recourse would still be open to the concerned person. However, it would be completely a different thing to say that the Appellate Authority itself can grant such relief. As stated in Shyam Kishore’s case any such exercise would make the provision itself unworkable and render the statutory intendment nugatory. Thus, the view taken by the High Court as regards the said question is set aside. [Para 25][254-D-F] Shyam Kishore and others v. Municipal Corporation of Delhi and another (1993) 1 SCC 22 – relied on. Commissioner of Income Tax v. Bansi Dhar & Sons and Others (1986) 157 ITR 665 (SC) : (1986) 1 SCC 523 : [1985] 3 Suppl. SCR 850; The Anant Mills Co. Ltd. v. State of Gujarat and Others (1975) 2 SCC 175 : [1975] 3 SCR 220; Seth Nand Lal and Another v. State of Haryana and Others 1980 (Supp) SCC 574 : [1980] SCR 1181; Vijay Prakash D. Mehta and another v. Collector of Customs (Preventive), Bombay (1988) 4 SCC 402 : [1988] 2 Suppl. SCR 434; Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of the City of Ahmedabad and others (1999) 4 SCC 468 : [1999]
2 SCR 895; State of Haryana v. Maruti Udyog Ltd. and others (2000) 7 SCC 348 : [2000] 3 Suppl. SCR 185; S.E. Graphites Private Limited v. State of Telangana and Ors. (2019) SCC Online SC 842; Matajog Dubey v. H. C. Bhari 1955 (2) SCR 925 : [1955] 2 SCR 925; Vinod Sethi v. Devinder Bajaj (2010)
8 SCC 1 : [2010] 7 SCR 424; Sooraj Devi v. Pyare Lal and Another (1981) 1 SCC 500 : [1981] 2 SCR 485; Simrikhia v. Dolley Mukherjee and Chhabi Mukherjee and Another (1990) 2 SCC 437 : [1990] 1 SCR 788; State v. K. V. Rajendran and Others (2008) 8 SCC 673 : [2008] 12 SCR 1141; Government of Andhra Pradesh and others v. P. Laxmi Devi (Smt.) (2008) 4 SCC 720 : [2008] 3 SCR 330; Har Devi Asnani v. State of Rajasthan and others (2011) 14 SCC 160 : [2011] 11 SCR 599; Income Tax Officer v. M. K. Mohammed Kunhi (1969) 2 SCR 65 – referred to
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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