Timely tax payment by cheque later replaced with demand draft was treated as compliance for appeal admission.

Payment of 12.5% of the disputed tax for admission of a VAT appeal was treated as compliant where the appellant issued a cheque within the prescribed period and later replaced it with a demand draft after the cheque was dishonoured. The timely cheque, followed by payment by demand draft before the appeal was taken up for admission, was treated as a continuation of the original payment effort. On the peculiar facts, the earlier decision cited by the revenue was held inapplicable, and the rejection of the appeal was set aside.

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Issues: Whether payment of 12.5% of the disputed tax, initially evidenced by a cheque issued within the prescribed period but later replaced by a demand draft after dishonour, could be treated as compliance with the requirement under section 31(1) of the APVAT Act for admission of the appeal.

Analysis: The appeal was filed within time and proof of payment of 12.5% of the disputed tax was furnished within the statutory period by issuing a cheque. When the cheque was dishonoured, the authorities issued notice and the petitioner thereafter made payment by demand draft. The payment by demand draft was treated as a continuation of the timely cheque payment and as having been made before the appeal was taken up for admission. In the peculiar facts, the earlier decision relied on by the respondents was held inapplicable.

Conclusion: The payment requirement was held to have been complied with within the prescribed time, and the rejection of the appeal was set aside.

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