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of <h1>SC upholds Section 62(5) PVAT Act's 25% pre-deposit rule, limits appellate powers under Sections 151 CPC and 482 CrPC</h1> <h3>M/s Tecnimont Pvt. Ltd. (Formerly known as Tecnimont ICB Private Limited) Versus State of Punjab & Others</h3> M/s Tecnimont Pvt. Ltd. (Formerly known as Tecnimont ICB Private Limited) Versus State of Punjab & Others - 2019 INSC 1054, 2019 (29) G.S.T.L. 737 (SC), ... Issues Involved:1. Validity of Section 62(5) of the Punjab Value Added Tax Act, 2005 (PVAT Act)2. Whether the condition of 25% pre-deposit for hearing first appeal is onerous, harsh, unreasonable, and violative of Article 14 of the Constitution of India3. Whether the first appellate authority has inherent powers to grant interim protection against the imposition of such a condition for hearing appeals on meritsDetailed Analysis:1. Validity of Section 62(5) of the PVAT ActThe Supreme Court examined the validity of Section 62(5) of the PVAT Act, which mandates a pre-deposit of 25% of the additional demand for an appeal to be entertained. The High Court had earlier upheld the validity of this provision, concluding that the State is empowered to enact such a provision and that it is legal and valid. The Supreme Court affirmed this view, referencing several precedents that upheld similar statutory provisions requiring pre-deposits for appeals.2. Condition of 25% Pre-depositThe High Court and the Supreme Court both addressed whether the 25% pre-deposit requirement was onerous, harsh, or unreasonable. The High Court had concluded that the condition is not violative of Article 14 of the Constitution of India. The Supreme Court supported this conclusion by citing various judgments, including The Anant Mills Co. Ltd. v. State of Gujarat and Seth Nand Lal v. State of Haryana, which established that the legislature can impose conditions on the right to appeal, provided they are not excessively onerous. The Court noted that such conditions are meant to prevent frivolous appeals and ensure the speedy recovery of taxes.3. Inherent Powers of the First Appellate AuthorityThe High Court had held that the first appellate authority possesses inherent powers to grant interim protection or injunction against the pre-deposit condition. This conclusion was based on the principle that statutory powers include all reasonable means necessary to make such powers effective, as seen in Income Tax Officer v. M. K. Mohammed Kunhi.However, the Supreme Court disagreed with this interpretation. It emphasized that while incidental or implied powers might exist, they cannot override explicit statutory provisions. The Court cited Matajog Dubey v. H. C. Bhari and other cases to support the principle that inherent powers cannot be used to contravene express statutory mandates. The Supreme Court thus set aside the High Court's conclusion on this issue, stating that allowing the appellate authority to waive the pre-deposit requirement would render the statutory provision nugatory.Conclusion:The Supreme Court upheld the validity of Section 62(5) of the PVAT Act and affirmed that the 25% pre-deposit requirement is not unreasonable or violative of Article 14. However, it reversed the High Court's decision regarding the inherent powers of the appellate authority, concluding that such powers cannot be used to bypass the statutory pre-deposit requirement. The appeals by the assesses were dismissed, and those by the State were allowed.
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