Pre-deposit computation under VAT law: earlier deposits count, and later amendments do not apply retrospectively.

Section 62(5) of the Punjab Value Added Tax Act, 2005 required the 25% pre-deposit to be computed on the total demand of tax, interest and penalty, not merely on the additional demand created, and any amount already deposited could be adjusted toward compliance. The later amendment introduced by the Punjab Value Added Tax (Fourth Amendment) Ordinance, 2011 was prospective and did not apply where the Tribunal's order had already been passed. On that basis, the appeal was entitled to be heard on merits, and the contrary decision was distinguished because compliance with the statutory pre-deposit condition had not been established there.

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Issues: Whether the pre-deposit requirement under section 62(5) of the Punjab Value Added Tax Act, 2005 was to be computed on the total amount of tax, interest and penalty imposed or on the additional demand created, and whether the appeal could be heard on merits without insisting on a different basis of deposit.

Analysis: The appeal turned on the construction of section 62(5) of the Punjab Value Added Tax Act, 2005. The Court followed the earlier view that the requisite deposit of 25 per cent had to be reckoned with reference to the total demand raised, and that an amount already deposited could be taken into account. The subsequent amendment introduced by the Punjab Value Added Tax (Fourth Amendment) Ordinance, 2011 was held to be prospective and therefore not applicable to the matter, as the Tribunal's order had been passed earlier. The reliance placed on the contrary decision was distinguished on facts because the assessee in that case had failed to establish compliance with the statutory pre-deposit condition.

Conclusion: The statutory deposit under section 62(5) was to be calculated on the total amount of tax, interest and penalty imposed, and the assessee's appeal was entitled to be heard on merits.

Ratio Decidendi: Where a pre-deposit provision requires payment of a percentage of the disputed demand, the amount already deposited may be counted toward compliance, and a later amendment enlarging or altering the basis of calculation will not apply retrospectively unless expressly or necessarily so provided.

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