2015 (3) TMI 519 - HC - VAT and Sales Tax

Validity of Tribunal s order - Whether Hon ble Tribunal erred in deleting liability of penalty by permitting such adjustment of carried forward input tax credit - held that - Following decision of - State of Gujarat Versus Dashmesh Hydraulic Machinery 2015 (3) TMI 134 - GUJARAT HIGH COURT - Same fact situation arises in the present matter. Under the circumstances, when the question is already covered by the decision of this Court, it cannot be said that any substantial questions of law would arise for consideration in the present appeal. - Decided against Revenue.

Summary

Issues:
1. Liability of penalty deletion by permitting adjustment of carried forward input tax credit.

Analysis:
The High Court addressed the issue of the liability of penalty deletion by permitting the adjustment of carried forward input tax credit. The case involved an appeal by the revenue against the deletion of penalty by the Tribunal. The Assessing Officer had made a tax assessment for outstanding demand, including tax and penalty. The first appellate authority dismissed the appeal, leading to a second appeal before the Tribunal. The Tribunal maintained the tax demand but removed the penalty. The High Court noted that a similar issue had been decided in a previous case. The Court emphasized the importance of intention to evade or avoid tax for imposing penalties. In this case, the Tribunal found that the assessee had sufficient input tax credit to adjust against the additional tax liability, indicating no intention to avoid tax payment. Therefore, the Tribunal's decision to delete the penalty was upheld, as there was no justification for imposing it. The Court dismissed the tax appeal, as no substantial question of law arose, given the precedent and factual findings.

In conclusion, the High Court upheld the Tribunal's decision to delete the penalty by allowing the adjustment of carried forward input tax credit. The Court reiterated the necessity of proving intent to evade or avoid tax for imposing penalties. Since the assessee had sufficient input tax credit to offset the additional tax liability, the Tribunal's deletion of the penalty was deemed appropriate. The Court found no substantial question of law in the matter, as it was in line with previous decisions. Therefore, the tax appeal was dismissed, leading to the disposal of the civil application as well.