2016 (9) TMI 1545 - HC - VAT and Sales Tax

Validity of assessment order - separate order of penalty - whether the impugned order could have been passed by the Assessing Officer imposing penalty by way of a separate order? - HELD THAT - The issue involved in this writ petition is squarely covered in favour of the dealer, by a decision of this Court reported in RAINBOW FOUNDATIONS LTD. VERSUS ASSISTANT COMMISSIONER (CT) (FAC) , T. NAGAR (SOUTH) ASSESSMENT CIRCLE, CHENNAI 2009 (10) TMI 875 - MADRAS HIGH COURT where it was held that under section 16 2 of the Act, the assessing authority had not jurisdiction to impose penalty by a separate and independent order. Even if a statute has brought in a new section by way of section 12C, given the fact that section 16 2 of the Act remained as it was, the view of the officer that by introduction of section 12C, section 16 2 would lost its validity, rendering the decision irrelevant, could not be accepted by any standard of reasoning. The impugned order is not sustainable - petition allowed.

Summary

Issues:
Challenge to Assessment Order for Assessment Year 2013-2014. Jurisdiction of Assessing Officer to impose penalty by separate order.

Analysis:
The petitioner contested the Assessment Order dated 10.09.2015 for the Assessment Year 2013-2014. The central issue in this case revolved around whether the Assessing Officer had the authority to levy a penalty through a distinct order. Both parties acknowledged that a previous decision of the Court, as cited in [2011] 37 VST 592 [Mad], favored the dealer in a similar scenario. The Court's ruling in that case emphasized that, despite the introduction of a new section (section 12C), section 16[2] retained its relevance. Consequently, the officer's interpretation that section 16[2] had lost its validity due to the new section was deemed unreasonable. The judgment concluded that penalties imposed through an independent order under section 16[2] were to be invalidated.

Applying the precedent from the aforementioned case to the present circumstances, it was deemed imperative to declare the impugned order as unsustainable. Consequently, the writ petition was allowed, and the Assessment Order dated 10.09.2015 was overturned. No costs were awarded in this matter. The connected miscellaneous petition was consequently closed.