2006 (7) TMI 587 - HC - VAT and Sales Tax

High Court defers on potato chips tax, upholds provisional assessment validity. Appeal process crucial.

Pepsico India Holdings (P.) Ltd. Versus State of Punjab and another

The High Court refrained from determining whether potato chips fell under entry 88 of Schedule B under the Punjab Value Added Tax Act, emphasizing that ... - Issues:Interpretation of entry 88 of Schedule B under Punjab Value Added Tax Act, 2005; Validity of provisional assessment under section 30 of the VAT Act; Availability of alternative remedy of appeal under section 62 of the VAT Act.Interpretation of Entry 88 of Schedule B:The petitioner, a dealer under the Punjab Value Added Tax Act, invoked entry 88 of Schedule B, specifying a lower tax rate of 4% for processed fruits and vegetables. The assessing authority contended that the tax deposited by the petitioner was short due to the application of the residual entry instead of entry 88. The petitioner argued that entry 88 applied to potato chips, the product in question, while the State contended otherwise. The High Court refrained from expressing an opinion on whether potato chips fell under entry 88, emphasizing that the issue could be raised during the appellate process or regular assessment.Validity of Provisional Assessment under Section 30:The assessing authority issued a provisional assessment order under section 30 of the VAT Act, holding that entry 88 was not applicable and tax was underpaid. The petitioner challenged the invocation of provisional assessment, arguing that it should only be used in cases of fraud, wilful neglect, or non-payment of tax. The State defended the assessment, stating that the tax due under the residual entry had not been paid, and entry 88 was incorrectly applied by the petitioner. The High Court noted that provisional assessment was part of the final assessment process and directed the petitioner to pursue the statutory remedy of appeal under section 62.Availability of Alternative Remedy of Appeal:The High Court highlighted that the petitioner had the statutory remedy of appeal under section 62 of the VAT Act to address all contentions raised. Emphasizing the availability of an alternative remedy, the Court disposed of the writ petition, reiterating that if an appeal was filed within one month, it would not be dismissed on grounds of limitation. The judgment underscored the importance of utilizing the appellate process for resolving the issues raised by the petitioner.