1990 (10) TMI 353 - HC - VAT and Sales Tax

Summary

Issues:
- Imposition of penalty under section 7AA of the Rajasthan Sales Tax Act for failure to file quarterly returns during provisional and final assessments.

Analysis:
The judgment deals with a revision petition against the order of the Rajasthan Sales Tax Tribunal regarding the imposition of penalties under section 7AA of the Rajasthan Sales Tax Act for failure to file quarterly returns. The Tribunal held that the penalty cannot be imposed again during the final assessment if it had been imposed during the provisional assessment. The petitioner contended that the penalty imposed during provisional assessment was subject to final order and could be imposed again during final assessment, rendering the provision redundant. However, the court rejected this argument, emphasizing the independent nature of penalty and tax proceedings, stating that penalties can be imposed even after assessment orders under sections 7A or 10 of the Act.

The judgment highlights that penalty proceedings and assessment proceedings are distinct and independent, with penalty imposition being quasi-criminal in nature. It notes that penalty for failure to file returns can be imposed under section 7AA even after assessment orders are passed. The court clarifies that section 7AA does not provide for provisional imposition of penalties like in provisional assessment under section 7A. Additionally, the judgment underscores that a crucial condition for imposing penalty under section 7AA is the satisfaction of the assessing authority that the dealer failed to furnish returns without reasonable cause. Without this finding and without providing the assessee with an opportunity for a hearing, the penalty cannot be imposed. The court highlights that in the absence of such a finding and due process, the penalty imposed under section 7AA during final assessment was rightly set aside by the Tribunal.

In conclusion, the court dismisses the revision petition, affirming the Tribunal's decision that penalty under section 7AA cannot be imposed again for the same default in filing quarterly returns. The judgment underscores the necessity of fulfilling the conditions precedent for imposing penalties under the Act and upholds the importance of due process and findings of non-compliance without reasonable cause before penalty imposition.