2008 (8) TMI 827 - HC - VAT and Sales Tax

Penalty orders - revisional orders - Held that - As noticed it is apparent that as of date, the assessment order passed against the petitioner, though upheld by the appellate authority the revision petition against the same is yet pending. In these circumstances, it cannot be suggested, as sought to be maintained by the Department, that the assessment order has attained finality. In fact, if the suggestion offered by the respondents qua the finality of the assessment order was to be accepted, then it would mean that the revision petition filed by the assessee-firm is wholly redundant and without any meaning. The aforesaid view cannot be taken by this court. The revisional powers available to a revisional authority authorize the authority to set aside the appellate as well as the revisional order, if a case for that course is made out by the assessee. Quash the revisional order, annexure P1, passed in penalty proceedings. The revision petition filed by the petitioner-firm is revived to its original number and it is directed that the aforesaid revision petition shall be heard by the same authority, where the revision petition filed by the petitioner against the assessment proceedings is stated to be pending.

Summary

Issues:
Challenge to penalty orders and revisional orders passed by assessing authority and revisional authority, imposition of penalty, dismissal of revision petition, attachment order.

Analysis:

The petitioner, a proprietorship concern in the timber business, faced penalty orders and revisional orders challenging the assessment proceedings. The Department alleged the petitioner imported goods from outside Madhya Pradesh for resale, based on third-party information. Despite inspection yielding no evidence, an assessment was suggested, denying the petitioner cross-examination rights. The assessing authority passed an assessment order, challenged in a revision petition dismissed in 2002. The petitioner filed a writ petition, leading to a direction for a second revision petition. The Additional Commissioner directed a fresh assessment, resulting in a similar order. The petitioner appealed, but the Appellate Deputy Commissioner dismissed it in 2008. Subsequently, penalty proceedings were initiated, leading to a penalty being imposed, challenged in a revision petition. The revisional authority set aside the penalty, remanding it for fresh determination, resulting in the same penalty. Another revision petition was rejected in 2008, citing finality of the assessment order upheld by the appellate authority.

The petitioner contested the penalty imposition and revisional authority's dismissal, claiming it was premature due to the pending revision petition against the assessment order. The respondents argued that penalty proceedings were independent of assessment proceedings and justified the penalty due to violations. The court heard arguments from both sides and noted the pending revision petition against the assessment order, indicating non-finality. It emphasized the revisional authority's power to set aside orders and the need for joint consideration of penalty and assessment proceedings to avoid conflicting views. Consequently, the court quashed the revisional order in penalty proceedings, reviving the revision petition for joint consideration with the assessment proceedings. The attachment order was also quashed, directing the revisional authority to decide both proceedings simultaneously but through separate orders.

The parties were directed to appear before the Deputy Commissioner of Commercial Tax, who would forward the case record to the relevant revisional authority for further proceedings.