2015 (9) TMI 630 - HC - VAT and Sales Tax

Penalty Proceedings Petitioner impugns order passed in penalty proceedings in which it was stated that assesse acknowledged notice and filed reply involving objections to proposal for assessment under Rule 6(5) of CST (Kerala) Rules 1957 It was alleged that Proceedings are initiated for levying penalty only on account of incorrect understanding of factual situation, So much so, proposal to impose penalty is without any basis Held that - In view of reply given by petitioner, finding in impugned order that in penalty proceedings petitioner has not explained anything regarding penalty notice was unsustainable Therefore impugned order set aside Decided against Petitioner.

Summary

Issues: Impugning Ext.P5 order in penalty proceedings, petitioner's objections to penalty proposal, sustainability of finding in impugned order, setting aside impugned order, liberty to submit detailed explanation or objection, conclusion of proceedings, disposal of writ petition.

In this judgment, the petitioner challenged the Ext.P5 order passed in penalty proceedings. The order highlighted that the assessee acknowledged the notice but failed to provide any explanation towards the penalty proposal. The petitioner raised objections stating that the penalty proposal lacked basis as the transaction was a purchase by the New Delhi office, and there was no malafide intention, thus questioning the imposition of penalty. The petitioner also argued that the proposal for maximum penalty was unfounded and requested for a nominal penalty, emphasizing the lack of circumstances warranting a maximum penalty.

The court noted the reply submitted by the petitioner and found the impugned order's conclusion that no explanation was provided regarding the penalty notice as unsustainable. Consequently, the court set aside the impugned order. However, the petitioner was granted the liberty to submit a detailed explanation or objection within one month, with the proceedings against the petitioner to be concluded within a further month. The writ petition was disposed of, ensuring that the petitioner would have a chance to be heard before the final order was passed.