2013 (5) TMI 480 - HC - VAT and Sales Tax

The petitioner has challenged show cause notice issued for imposition of penalty because of some observations made in the assessment order.- against the assessment order an appeal preferred by the petitioner is pending before the respondent no.4 and till the appeal is decided, further proceedings in continuation to show cause notice may be stayed. Held that - We dispose of this petition in terms of the directions issued by the Division Bench in Court in M/s Vijay Tank & Vessels Private Limited Vs. The Divisional Deputy Commissioner of Commercial Tax, Sagar & others. The aforesaid directions shall be applicable in the present case mutatis mutandis.

Summary

Issues:
1. Challenge to show cause notice for penalty imposition.
2. Stay application for penalty proceedings.
3. Stay application for appeal proceedings.
4. Timely disposal of appeal challenging assessment order.

Analysis:

Issue 1: Challenge to show cause notice for penalty imposition
The petitioner sought to quash the notice dated 11.07.2012 issued by the respondent under section 52(2) for penalty proceedings for the year 2008-09. The notice was challenged due to observations made in the assessment order. The petitioner emphasized the pendency of an appeal against the assessment order before the Appellate Board and requested a stay on further proceedings related to the penalty notice until the appeal is decided.

Issue 2: Stay application for penalty proceedings
The petitioner relied on Division Bench judgments and a Single Bench judgment to support the argument for staying penalty proceedings until the appeal challenging the assessment order is resolved. The counsel for the petitioner urged that based on previous court directions, the current petition should be disposed of accordingly.

Issue 3: Stay application for appeal proceedings
The petitioner also sought directions for the Appellate Board to hear and decide the stay application and appeal at an earlier date. The learned counsel for the petitioner highlighted the importance of ensuring that penalty proceedings are kept in abeyance until a decision is reached on the appeal against the assessment order.

Issue 4: Timely disposal of appeal challenging assessment order
The High Court considered the precedent set by a Division Bench judgment in a similar case where it was directed that the appeal challenging the original assessment order should be heard and decided within a specified timeframe. The Court emphasized that until the appeal is resolved, no penalty proceedings should be initiated. The judgment in the present case was disposed of in line with the directions issued in the previous case, ensuring consistency in the application of legal principles.

This detailed analysis of the judgment provides insights into the legal reasoning behind the decision and the application of relevant case laws to resolve the issues raised by the petitioner effectively.