2015 (3) TMI 664 - HC - VAT and Sales Tax

Imposition of penalty - penalty was imposed on the present appellant/dealer for not filing the report within the meaning of sub-Sections (1) and (2) of Section 61 of the Maharashtra Value Added Tax Act, 2002 - Delay in filing of report due to accountant leaving the job abruptly- Held that - The discretion that is vested in the Tribunal in matters of imposition of penalty is circumscribed by the fact that if the report is filed within the period as specified in proviso, namely, one month and the dealer proves to the satisfaction of the Commissioner that the delay was on account of factors, beyond his control, then the penalty is not to be imposed at all. Sub-Section (2) of Section 61 contains this proviso and which, thus, enables the Tribunal to condone the delay, which occurs beyond the period stipulated therein. However, the Tribunal is empowered to impose penalty and that discretionary power is not being challenged or questioned. In the present case, the Tribunal imposed the penalty after recording a finding that the Accountant may have left the job on 30th August,2008. But there is no reasonable explanation forthcoming for the delay in filing the report thereafter belatedly in April, 2009. That the appellant, therefore, was not prevented by any factors, beyond its control, is apparent from the reading of this finding of the Tribunal. In these circumstances, so as to discourage the dealers or parties like the appellant from delaying the filing of the report that the penalty has been imposed. In fact, the penalty imposed of ₹ 1,70,747/- in the first appellate order has been brought down and reduced to ₹ 1,00,000/- in the second appeal by the Tribunal. In such circumstances, we do not find that the order raises any substantial questions of law. - Decided against assessee.

Summary

Issues:
Challenge to order of Maharashtra Sale Tax Tribunal reducing penalty under Maharashtra Value Added Tax Act, 2002.

Analysis:
1. The appellant challenged the order of the Maharashtra Sale Tax Tribunal, which reduced the penalty imposed on the dealer for not filing a report within the stipulated period under Section 61 of the Maharashtra Value Added Tax Act, 2002. The Tribunal had reduced the penalty from Rs. 1,70,747 to Rs. 1,00,000 in the second appeal.

2. The appellant argued that there was no mala fides involved in the delay of filing the report. The delay was due to the abrupt departure of the accountant employed by the dealer, who failed to inform the management about the report. The appellant substituted the accountant with a new employee, causing a delay of seven months and six days. The appellant contended that the Tribunal failed to consider these circumstances judiciously.

3. The High Court examined the Tribunal's order to determine if there was a substantial question of law involved. It disagreed with the appellant's argument that no penalty should have been imposed. The Tribunal had the discretion to impose a penalty if the report was not filed within the specified period due to factors beyond the dealer's control. The Tribunal found that the delay in filing the report was not justified by circumstances beyond the dealer's control, as the new employee took time to file the report after becoming aware of the situation.

4. The High Court noted that the Tribunal had the power to impose a penalty, and in this case, it found that the penalty was justified to discourage delays in filing reports. The Tribunal's decision to reduce the penalty from the initial amount imposed was considered reasonable. The High Court concluded that there were no substantial questions of law raised in the appeal, and thus, the appeal was dismissed with no order as to costs.