1988 (1) TMI 334 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether a revision lies to the Deputy Commissioner under section 33 and if the writ petition is maintainable.
2. Whether in the case of self-assessment, section 24(3) is automatically attracted, and if the petitioner should have been given an opportunity, and whether the notice is mandatory.

Analysis:

1. The petitioner filed a writ petition under article 226 challenging the order of the third respondent imposing a penalty under section 24(3) of the Act. The petitioner contended that the penalty was imposed without following proper procedures and without giving an opportunity to pay the tax demanded within the stipulated time. The petitioner argued that the penalty under section 24(3) is not mandatory or automatic, but subject to discretionary exercise by the assessing authority. The petitioner relied on legal precedents to support their argument that the imposition of penalty should be based on wilful non-compliance by the assessee. The respondents contended that the levy of penalty was automatic and there was no option to avoid it. The court held that the order imposing the penalty was not in accordance with the law as the assessing authority did not conduct the necessary enquiry as required by rule 18(4) of the Rules. Therefore, the court quashed the order and directed the refund of the penalty amount to the petitioner.

2. The court addressed the issue of whether a revision lies to the Deputy Commissioner under section 33 and if the writ petition was maintainable. The petitioner argued that the remedy available with the third respondent had been exhausted before filing the writ petition. The court found that the writ petition was maintainable under article 226 of the Constitution since the petitioner had exhausted the available remedy. Regarding the second issue, the court considered the petitioner's claim that in cases of self-assessment, section 24(3) should not be automatically attracted, and the petitioner should have been given an opportunity before imposing the penalty. The court agreed with the petitioner's argument and held that the order imposing the penalty was not in accordance with the law as the authorities failed to follow the required procedures. The court quashed the order and directed the refund of the penalty amount to the petitioner, emphasizing the importance of giving the aggrieved party an opportunity before imposing penalties.