2014 (1) TMI 1103 - HC - VAT and Sales Tax

Amount of penalty reduced to 25% for late fining of VAT return by the tribunal - Entitlement of 75% of the amount which has been paid earlier while restoring registrations - Held that - as such they are not disputing their liability to pay the amount which they have deposited as penalty for late submissions of the returns. It is submitted that as such no formal order has been passed by the authority levying/imposing the penalty under the Act/Rules. He has stated at the bar, under the instructions from the respective clients, that the amount, which the respective dealers opponents herein have deposited while restoring the registration, may be treated as penalty for late submissions of the returns. However, a formal order may be directed to be passed by the appropriate authority to impose/levy the penalty of the same amount. He has also requested to permit the respective dealers-opponents herein to withdraw the appeals, which they preferred before the appellate tribunal. He has also stated at the bar that as such the respective dealers opponents herein are satisfied with the amount, which have deposited, which may be treated as penalty and they shall not challenge the quantum of penalty for which a formal order may be passed - respective dealers-opponents herein have agreed that the amount, which they have already deposited while restoring their registrations, be treated as penalty and they have accepted the said amount as penalty and only formal order of imposing penalty is to be passed by the appropriate authority within the stipulated time - Decided in favour of Revenue.

Summary

Issues:
Challenge to reduction of penalty amount by the tribunal.

Analysis:
The Department filed appeals challenging a tribunal's decision reducing penalty amounts deposited by dealers for late submission of returns. The dealers had their registrations canceled for non-submission of returns, which were restored upon depositing penalty amounts. The tribunal acknowledged no formal penalty order was issued but still reduced the penalty to 25%. The Department contested this decision.

The dealers did not dispute depositing penalty amounts but sought formal penalty imposition orders. Their advocate requested withdrawal of appeals and acceptance of the deposited amounts as penalties. The court permitted withdrawal of appeals and set aside the tribunal's decision. It directed the appropriate authority to issue formal penalty orders within four weeks based on the deposited amounts, as agreed by the dealers.

The court noted the dealers' agreement to treat the deposited amounts as penalties and their willingness to pay if registrations were restored. The Tax Appeals were disposed of, and related Civil Applications were also deemed disposed of due to the appeal resolution.