2014 (1) TMI 1614 - HC - VAT and Sales Tax

Reduction of penalty imposed by the assessing officer - Held that - while exercising power of imposing and, thereupon, to quantify penalty, the Assessing Officer gave reasons to support exercise of power, but did not utter a single word, why it was imposing the highest penalty awardable under the law. it was obligatory on the part of the Assessing Officer to state the reasons, why he is exercising his discretion of imposing highest penalty permissible. He did not utter a single word in support thereof. First Appellate Authority refused to interfere and the Tribunal reduced the quantum of the penalty. - Decided against Revenue.

Summary

Issues: Delay in preferring the Revision Application, imposition of highest penalty without reasons, reduction of penalty by the Tribunal, dismissal of the Revision Application.

In this case, the appellant obtained an order condoning the delay in preferring the Revision Application without issuing any notice to the respondent. However, the court found this order to be non est in law and recalled it due to a significant delay of 301 days in preferring the Appeal. The court considered an Application for condonation of delay but found no cogent reason for the delay. The Assessing Officer imposed the highest penalty without providing any reasons for doing so, which is against the law as it obligates the officer to justify the imposition of the maximum penalty. The First Appellate Authority did not interfere, but the Tribunal reduced the penalty amount. The Department then sought reasons for the reduction, which the court found surprising given the lack of reasons provided for the original highest penalty. The court emphasized that liability cannot be imposed without proper reasons, even if authorized to do so. Consequently, the court dismissed the Application for condonation of delay, leading to the failure of the Revision and its dismissal.