2012 (7) TMI 1127 - HC - VAT and Sales Tax

Summary

Issues involved: Challenge to penalty proceedings u/s 53(3) of APVAT Act 2005 for under-declaration of tax without establishing fraud or willful neglect.

Summary:
The High Court of Andhra Pradesh heard the case where penalty proceedings u/s 53(3) of APVAT Act 2005 were challenged for under-declaration of tax without proving fraud or willful neglect. The impugned penalty order was based on a show-cause notice dated 4-4-2012, which lacked details regarding fraud or willful neglect by the petitioner. Section 53 of the Act provides for penalty in cases of under-declared tax, distinguishing between situations with and without fraud or willful neglect. The Court noted that the show-cause notice was deficient in providing the necessary information to the dealer, thus denying a reasonable opportunity to be heard. Consequently, the Court allowed the writ petition, quashing the penalty order and the defective show-cause notice. The 2nd respondent was given the option to issue a proper notice in compliance with the law. No costs were awarded in this matter.