2013 (1) TMI 704 - HC - VAT and Sales Tax

Penalty imposed under section 69(2) of the M.P. Commercial Tax Act 1994 - Held that - In the present case while passing penalty order the assessing authority disregarded all the principles. The assessing authority all along proceeded on the basis that it was for the petitioner to prove his innocence and not for the Department to prove the guilt; and that the finding reached by him in the assessment proceedings about the concealment of turnover and submission of false returns concluded the matter. Thus the order of penalty passed by the assessing authority is patently in violation of provisions of section 43(1) of the Act and cannot be sustained. Appeal allowed. Matter remitted back to the assessing officer i.e. respondent No. 1 the Commercial Tax Officer Circle-I Satna for a fresh adjudication after extending/giving proper opportunity to the petitioner.

Summary

Issues:
Challenge to penalty order under section 69(2) of M.P. Commercial Tax Act, 1994.

Analysis:
The petitioner, a registered dealer under the M.P. Commercial Tax Act, 1994, challenged a penalty of &8377; 2,03,830 imposed by the assessing officer under section 69(2). The penalty was initiated on October 4, 2004, based on an inspection of the petitioner's business premises and subsequent assessment. The petitioner contended that the penalty should be set aside or stayed pending appeal against the original assessment. The revisional authority dismissed the revision petition, leading to the present challenge. The petitioner relied on the case of S.R. Kalani & Co. v. C.L. Sharma, emphasizing that penalty can only be imposed if there is deliberate concealment or false return, with the burden of proof on the Department. The assessing authority in this case failed to follow these principles and proceeded incorrectly. The Court agreed with the petitioner's argument and set aside the penalty order, remitting the matter back for fresh adjudication.

Conclusion:
The High Court, following the principles laid down in the S.R. Kalani case, set aside the penalty order imposed under section 69(2) of the M.P. Commercial Tax Act, 1994. The Court directed a fresh adjudication by the assessing officer, emphasizing the need for proper opportunity to be given to the petitioner. The writ petition was disposed of accordingly, with no costs awarded.