2011 (9) TMI 917 - HC - VAT and Sales Tax

Summary

Issues:
1. Revision petition against order allowing Revenue's appeal due to missing documents during goods checking.
2. Compliance with principles of natural justice in penalty proceedings under section 78(5) of the Act.
3. Applicability of recent Supreme Court decisions on penalty imposition.

Issue 1:
The revision petition was filed by the assessee challenging the order of the Tax Board that allowed the Revenue's appeal. The ground for appeal was the absence of bill and bilty with the goods during a truck check, with the assessee claiming the bilty was not prepared to avoid a commission. However, the bill for the checked goods was presented by the assessee.

Issue 2:
The Court emphasized the need for compliance with the principles of natural justice in penalty proceedings under section 78(5) of the Act. Referring to various Supreme Court decisions, the Court highlighted the importance of providing an opportunity of hearing to the assessee and ensuring fairness in the penalty imposition process. It was noted that penalty orders should address the contentions raised by the assessee in detail, and any deficiencies in compliance with the law must be clearly communicated to the assessee.

Issue 3:
Regarding the applicability of recent Supreme Court decisions on penalty imposition, the Court mentioned that earlier grounds such as absence of mens rea or amendments in the law were no longer sustainable based on the recent apex court rulings. Despite the Revenue's revision petition against the success of the assessee in lower appellate forums, the Court stressed the importance of adhering to principles of natural justice. The Court directed a fresh opportunity of hearing for the assessee, emphasizing the need for a specific show-cause notice outlining the defects and deficiencies in compliance with the law before deciding on penalty proceedings.

In conclusion, the Court set aside the Tax Board's order and remanded the matter back for fresh consideration by the assessing authority, ensuring compliance with the principles of natural justice and addressing all contentions raised by the assessee. The assessing authority was instructed to decide the case afresh within six months, providing a fair opportunity of hearing to the assessee.