Pre-deposit requirement under VAT revision upheld as directory, with scope for waiver to prevent undue hardship.

A prior-deposit requirement under the Punjab VAT Act for filing revision was examined against Article 14 and an earlier binding ruling on a pari materia appellate provision. The provision was treated as directory, not an absolute bar, because the authority may grant interim protection and waive the deposit in appropriate cases to avoid undue hardship and preserve the statutory remedy. On that basis, the requirement was upheld as valid and intra vires, and the revision was to be decided in accordance with law and the earlier principles.

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Issues: Whether Section 65(3) of the Punjab Value Added Tax Act, 2005, requiring prior deposit of twenty-five per cent of tax, penalty and interest as a condition for entertaining a revision, was unconstitutional and violative of Article 14.

Analysis: The challenge was examined in the light of the earlier binding decision dealing with the pari materia appellate provision in the PVAT Act. That decision had held that the pre-deposit requirement is not an absolute fetter, because the authority has the power, by necessary implication, to grant interim protection and waive the condition in appropriate cases. On that reasoning, the provision was treated as directory rather than mandatory, and the power to grant partial or complete waiver was recognised to prevent undue hardship and frustration of the statutory remedy.

Conclusion: Section 65(3) was held to be valid and intra vires the Constitution. The writ challenge to the provision failed, and the Tribunal was directed to decide the revision in accordance with law and the earlier binding principles.

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