2013 (11) TMI 354 - HC - VAT and Sales Tax

Penalty u/s 12 - Whether the Tribunal is well in the facts and circumstances of the case in not considering the fact that the levy of penalty under Section 12(3)(c) of the Act is possible only when the assessment is made under Section 12(2) of the Act and in the present case, the assessment is made under Section 12(1) of the Act and hence the levy of penalty under Section 12(3)(c) of the Act is beyond jurisdiction - Held that - proceedings initiated to revise the order of assessment for levy of penalty as though the petitioner had opted for monthly return under Rule 18 could not be sustained. Taking note of the fact that the assessee had not raised a dispute as regards the levy of penalty in respect of 74 days delay in filing the annual return, we hold that that the present order levying penalty as though the petitioner had opted for filing monthly return cannot be sustained. In the circumstances the original order of levying penalty dated 12.11.1997 remains undisturbed. The revised order in so far as it seeks to levy penalty in respect of monthly returns stands set aside - Decided in favour of assessee.

Summary

Issues:
1. Levy of penalty under Section 12(3)(c) of the Act based on assessment under Section 12(1) instead of Section 12(2).

Detailed Analysis:
The case involved a Tax Case Revision where the substantial question of law was whether the Tribunal erred in not considering that the levy of penalty under Section 12(3)(c) of the Act is permissible only when the assessment is conducted under Section 12(2) but not under Section 12(1). The original assessment in this case was made under Section 12(1) for the assessment year 1996-97. The penalty was initially levied for belated filing of the annual return, which was later revised based on monthly returns and the tax paid. The petitioner challenged the penalty, arguing that the calculation of the number of days was incorrect and that the tax was paid before assessment. The issue was whether the penalty under Section 12(3)(c) could be imposed based on the original assessment under Section 12(1).

The assessee contended that the levy of penalty under Section 12(3)(c) was arbitrary and illegal since the assessment was made based on books of accounts and returns filed. It was argued that as the assessee had not chosen assessment under Rule 18 for monthly returns, Rule 15 should apply. The Court considered that the assessee's case fell under Rule 15, and any penalty could only be related to annual returns, as already considered in the original assessment. It was highlighted that the assessee had opted for annual returns under Rule 15, and thus, any delay should be calculated accordingly.

The Court examined whether the assessee had opted for filing monthly returns and found that the assessee had chosen assessment under Rule 15 for annual returns. Therefore, the delay in filing the annual return was correctly calculated as per Rule 15. The Court concluded that the proceedings initiated to revise the penalty based on the assumption of monthly returns under Rule 18 were not sustainable. It was held that the original order levying penalty for the delay in filing the annual return remained valid, and the revised order attempting to impose penalties for monthly returns was set aside. Consequently, the Tribunal's order was set aside to that extent, and the Tax Case Revision was disposed of without costs.