Pre-deposit under Punjab VAT appeals is directory, with waiver and interim protection available where hardship and a strong prima facie case exist.

The mandatory pre-deposit under Section 62(5) of the Punjab Value Added Tax Act, 2005 was treated as directory, not absolute, because the first appellate authority is taken to have incidental power to grant interim protection and waive the deposit wholly or partly in appropriate cases. That discretion may be exercised where a strong prima facie case and undue hardship are shown, so the appeal is not rendered nugatory. Appeals dismissed mechanically for non-deposit without examining merits should be set aside and remitted for fresh consideration of waiver and interim protection.

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Issues: Whether the mandatory pre-deposit requirement under Section 62(5) of the Punjab Value Added Tax Act, 2005 was directory and whether the appellate authority had power to waive the deposit and grant interim protection in appropriate cases; and whether the dismissal of the appeals for non-deposit warranted interference.

Analysis: The petition was disposed of in terms of the earlier decision holding that, by necessary implication, the first appellate authority under the Punjab Value Added Tax Act, 2005 has power to grant interim protection and that the pre-deposit requirement is directory in nature. The authority may waive the condition, wholly or partly, where a strong prima facie case and undue hardship are shown, so that the appeal is not rendered nugatory. Where appeals were dismissed for want of pre-deposit without examination of merits, the appropriate course was to set aside those orders and remit the matter to the first appellate authority for consideration of an application for interim protection.

Conclusion: Section 62(5) was held to be directory and capable of partial or complete waiver in deserving cases; the dismissal orders were not sustained, and the matter was remitted to the first appellate authority for fresh consideration.

Final Conclusion: The petitioners obtained relief against the mechanical dismissal of the appeals, and the dispute was sent back to the appellate stage for consideration of waiver and interim protection in accordance with law.

Ratio Decidendi: A statutory pre-deposit condition may be treated as directory where the appellate authority must be taken to possess incidental power to grant interim protection and waive deposit in appropriate cases to prevent the appeal from being frustrated.

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