Adarsh Kumar Goel, J. - (1.) THIS petition seeks quashing of Rule 21(1), (2) of the Punjab Value Added Tax Rules, 2005, framed under the provisions of the Punjab Value Added Tax Act, 2005 (in short, "the VAT Act") as ultra vires, in addition to quashing of notice dated December 24, 2007, annexure P1, requiring the petitioner to appear with record to show that due tax had been paid ; assessment order dated January 21, 2008, annexure PIII rejecting claim for input -tax credit on petrol/diesel which evaporated after purchase and before sale and also show -cause notice dated February 15, 2008, annexure PIV, asking the petitioner to show cause why penalty be not imposed on it.
(2.) THE petitioner is engaged in the business of refining of crude oil and marketing of various petroleum products. It purchases petroleum in the State after paying value added tax. Thereafter, the said products are sold and tax paid at the time of purchase is claimed as input -tax credit to be deducted out of the tax liability attracted at the time of sale. During assessment for the assessment year 2005 -06, the assessing officer allowed input -tax credit to the extent of goods sold but claim of the petitioner is that in the natural process, part of petroleum products evaporated on which tax had been paid and the petitioner was entitled to input -tax credit on the purchase value thereof irrespective of the fact that to that extent, goods were not available for sale. It is the case of the petitioner that the order of assessment disallowing input -tax credit to the petitioner on the purchase value of the product which evaporated, was illegal. Prayer has also been made to declare Rule 21 of the Rules, which makes input -tax credit inadmissible if the goods are lost, destroyed or damaged because of theft, fire or natural calamity, as ultra vires.
(3.) ON behalf of the State, a preliminary objection has been taken that there is an alternative remedy by way of appeal and mere fact that 25 per cent of the tax assessed is required to be deposited as a condition precedent, cannot be a ground to hold that the remedy of appeal was not effective in absence of any material to show that the petitioner had any financial hardship in paying the said amount.;