2019 (9) TMI 1303 - HC - VAT and Sales Tax

Revision of assessment - levy of penalty - It is the specific contention of the petitioner that there was no intentional or wilful sales omission on the part of the petitioner and thus, imposing penalty cannot be sustained, more particularly, when the petitioner has paid the tax due and interest immediately, on receipt of notice of proposal itself - HELD THAT - Such imposition of penalty would arise only when there is a wilful non-disclosure of turnover and to that effect a specific finding should be rendered by the Assessing Officer in the impugned order. In this case, there are no such findings rendered, except to state that the penalty is levied for willful non-disclosure of turnover. It is true that the petitioner has not responded to the notice dated 06.01.2017 - However, considering the fact that the petitioner has already discharged the tax and interest liability, this Court is of the view that one more opportunity shall be granted to the petitioner, more particularly, when he has succeeded before the Appellate Authority in getting the matter remitted back to the Assessing Officer to reconsider the issue afresh. The matter is remitted back to the Assessing Officer to reconsider the issue on the penalty once again, after giving an opportunity of personal hearing to the petitioner - Petition allowed by way of remand.

Summary

Issues:
Challenge against order revising assessment for the assessment year 2014-2015, imposition of tax, penalty, and interest under the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner contested an order revising the assessment for the assessment year 2014-2015, specifically objecting to the penalty imposed. The petitioner had paid the tax and interest promptly upon receiving the initial notice of proposal but was later asked to pay penal interest, which was also settled. Despite this, the Assessing Officer confirmed a substantial penalty. The petitioner argued that there was no intentional omission on their part and that the penalty was unjustified. The First Appellate Authority remitted the matter back to the Assessing Officer for reconsideration after a personal hearing was suggested, but the penalty was confirmed again in the subsequent order. The petitioner's counsel argued that penalty should only be imposed for willful non-disclosure of turnover, emphasizing that no deliberate omission occurred. The respondent's counsel contended that the petitioner's failure to respond with an explanation to the penalty proposal justified the Assessing Officer's decision.

The High Court examined the case and noted that while the tax and interest liabilities were settled by the petitioner, the dispute centered on the penalty. The court agreed with the petitioner's argument that penalty should only be imposed for willful non-disclosure of turnover, which necessitates a specific finding by the Assessing Officer. Notably, the court observed that the Assessing Officer did not provide such a finding in the impugned order, merely stating the penalty was for willful non-disclosure without substantiating it. Despite the petitioner's failure to respond to a subsequent notice, the court considered the previous successful appeal to the Appellate Authority and decided to grant the petitioner another opportunity. The court allowed the writ petition, setting aside the impugned order and remitting the matter back to the Assessing Officer for a fresh consideration of the penalty issue after affording the petitioner a personal hearing. The petitioner was instructed to submit objections within two weeks, and the Assessing Officer was directed to issue a decision within four weeks after the hearing. No costs were awarded in the case, and connected miscellaneous petitions were closed.