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2019 (1) TMI 1706 - HC - VAT and Sales TaxImposition of penalty u/s sub-section (6) of section 20 of the Madhya Pradesh Value Added tax Act, 2002 - non-registration under section 10 of Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adhiniyam, 2011 - HELD THAT - The penalty imposed is for violation of sub-section (2) of section 10 of the 2011 Act, which mandates compulsory registration under 2011 Act. The penalty for non-registration is engrafted under sub-section (3) of section 10. The provision no where empowers the authority to treat the non-registration under section 10 of the 2011 Act as a violation of provisions of VAT Act, 2002. And as evident from section 8 of the 2011 Act, the applicability of 2002 Act has been subjected to the provisions of the 2011 Act. In the case at hand evidently, the provisions of the Act of 2002 are subjected to that of the provisions of 2011 as is evident from section 8 of the Act of 2011 which rules out the applicability of sub-section (6) of section 20 of the Act of 2002 - When the impugned orders tested on the anvil of above analysis, the order directing for imposition of penalty under sub-section (6) of section 20 for violation of section 10 of the Act of 2011 cannot be approved of. The orders passed by assessing officer, appellate authority and Appellate Board for imposition of penalty under sub-section (6) of section 20 of the Act of 2002 for non-registration under the Act of 2011 are set aside - the matter is relegated to assessing officer for fresh consideration under sub-section (3) of section 10 of the Act of 2011 - appeal disposed off.
Issues:
- Interpretation of penalty clause under section 20(6) of the Madhya Pradesh Value Added Tax Act, 2002 for non-registration under the Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adhiniyam, 2011. Analysis: 1. The primary issue in this case pertains to the interpretation of the penalty clause under section 20(6) of the Madhya Pradesh Value Added Tax Act, 2002 for non-registration under the Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adhiniyam, 2011. The court deliberated on whether it is lawful for the authorities to impose penalties for non-registration under the Act of 2011 using provisions from the VAT Act of 2002. 2. The facts of the case revealed that the appellant, a limited company engaged in entertainment business, was subject to the provisions of the 2011 Act due to its turnover exceeding the specified limit. The appellant registered after the prescribed period and paid the due taxes. However, a penalty was imposed under section 20(6) of the VAT Act, 2002 for non-registration under the 2011 Act. 3. The court analyzed relevant legal provisions, including section 10 of the 2011 Act, which mandates compulsory registration for liable entities. It noted that the penalty for non-registration is explicitly provided under sub-section (3) of section 10, without empowering authorities to treat non-registration as a violation of the VAT Act, 2002. 4. Referring to constitutional provisions and previous legal precedents, the court emphasized strict interpretation of taxing statutes. It highlighted that penalties must be levied in accordance with prescribed procedures, and equitable considerations are irrelevant in tax matters. The court also underscored the importance of interpreting statutes based on expressed provisions without implying additional conditions. 5. The court further examined section 8 of the 2011 Act, which subjects the applicability of the VAT Act, 2002 to the provisions of the 2011 Act. This provision clarifies that the rules and penalties under the VAT Act are applicable to entities under the 2011 Act in a specific manner, emphasizing the conditional nature of statutory provisions. 6. Ultimately, the court concluded that penalties imposed under section 20(6) of the VAT Act, 2002 for non-registration under the 2011 Act were not justified. The orders for penalty imposition were set aside, and the matter was remanded for fresh consideration under the relevant provisions of the 2011 Act. The appeal was disposed of accordingly, emphasizing the importance of adhering to the specific legal framework governing tax liabilities and penalties.
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