2013 (7) TMI 746 - HC - VAT and Sales Tax

Penalty u/s 45 A of the KGST Act - Court remitted matter back for re-assessment - Held that - Despite the lapse of nearly 5 years, no counter affidavit has been filed from the part of the respondents, nor is there any report filed by the second respondent after examining /verifying the assessment records of the fourth respondent to confirm and conclude the position - Decided in favour of assessee.

Summary

Issues:
Challenge to penalty under Section 45A of KGST Act based on disputed sales in April 2003.

Analysis:
The petitioner, a registered dealer under the KGST Act, traded rubber sheets and held a license from the Rubber Board, which was later canceled, leading to the closure of the business. The petitioner filed a 'Nil' return for April 2003. Subsequently, a penalty under Section 45A was proposed for alleged sales to a specific party in April 2003. The petitioner denied these sales, leading to a revision under Section 45A(3) before the second respondent. The second respondent found the penalty imposition incorrect, lacking sufficient evidence, and directed a chance for cross-examination of the purchaser. The penalty was set aside, emphasizing the need for natural justice and further verification of records.

The petitioner challenged the final penalty order, alleging non-compliance with the second respondent's directions for cross-examination and lack of evidence. The petitioner explained the withdrawal of funds from the account and attributed the alleged sales to another individual who had access to business documents. Despite specific directions in Ext.P4, the first respondent finalized the penalty order, prompting the petitioner's challenge.

Upon court review, an interim order was issued, directing the second respondent to verify the assessment records of the concerned party and stay recovery proceedings against the petitioner. However, after five years, no counter affidavit or report was filed by the respondents, leading the court to set aside the impugned order. The court emphasized the need for fresh proceedings in line with Ext.P4 directions and the interim order, granting the petitioner a fair opportunity to defend the case. The court ordered expeditious finalization of any further steps within four months from the judgment date.

In conclusion, the court disposed of the writ petition, setting aside the penalty order and instructing the respondents to proceed with the case afresh, ensuring due process and timely resolution.