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2017 (4) TMI 1442 - HC - VAT and Sales TaxStay of assessment proceedings till finalization of the second appeal - Section 47 (6) OF KVAT ACT - HELD THAT - It is true that during pendency of the proceedings, Ext. P4 notice has been issued by the assessing authority under Section 27 (1) of the KVAT Act, which according to the appellant is not correct or sustainable, as the order imposing penalty under Section 47 (6) has not become final, the second appeal being pending. Still, the writ petition came to be dismissed in-limine, which is under challenge. It is also pointed out that the law is well settled that the assessment proceedings are independent of penalty proceedings. The learned counsel for the appellant has not referred to any provision of law or any judicial precedent to the effect that during pendency of the proceedings in connection with penalty, the assessment proceedings have to be kept pending. In the said circumstances, interference is declined and the Writ Appeal is dismissed.
Issues:
1. Stay of assessment proceedings till finalization of second appeal under Section 47(6) of the KVAT Act. 2. Challenge of writ petition dismissal in-limine. 3. Interplay between assessment proceedings and penalty proceedings. Analysis: 1. The appellant sought a stay of assessment proceedings pending finalization of the second appeal before the second appellate authority regarding proceedings under Section 47(6) of the KVAT Act. The appellant's goods were intercepted, leading to an order under Section 47(6) for alleged tax evasion. Despite the pending second appeal, the assessing authority issued a notice under Section 27(1) of the KVAT Act. The appellant contended this notice was premature as the penalty order had not yet become final. The writ petition for stay of assessment proceedings was dismissed, prompting the appeal. 2. The appellant argued that the assessing authority's actions were premature and not sustainable due to the pending second appeal. However, the learned Government Pleader contended that assessment and penalty proceedings are independent, emphasizing the need for the appellant to provide relevant records for finalizing the assessment. The court noted the absence of legal provisions or precedents requiring assessment proceedings to be stayed during penalty proceedings. Consequently, the court declined interference, dismissing the writ appeal while preserving the appellant's rights to establish facts during assessment proceedings. 3. The judgment clarified the distinction between assessment and penalty proceedings, highlighting their independence. The court emphasized the appellant's opportunity to present relevant records for assessment finalization, regardless of ongoing penalty proceedings. The decision underscored the need for a fair hearing for the appellant/assessee during assessment proceedings, ensuring the appellant's rights and liberties were upheld throughout the process. This detailed analysis of the judgment addresses the issues raised in the case comprehensively, outlining the arguments presented by the parties and the court's rationale in reaching its decision.
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