2017 (3) TMI 1423 - HC - VAT and Sales Tax

Penalty - whether the appellate authority is entitled to enhance the penalty in an appeal filed by the assessee u/s 14 of the Punjab Excise Act, 1914? - Held that - Section 14 does not confer a power upon the appellate authority to pass an order more burdensome than the order appealed against. It does not entitle the appellate authority to enhance the penalty - Where the Legislature intends conferring a power upon an appellate or revisional authority to enhance the relief in favour of the respondent, it does so specifically - The impugned order enhancing the penalty was, therefore, without jurisdiction - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Whether the appellate authority can enhance the penalty in an appeal under Section 14 of the Punjab Excise Act, 1914.

Analysis:
The petitioner sought to quash orders passed by the Financial Commissioner Taxation, Punjab, and the Collector-cum-Deputy Excise and Taxation Commissioner, Ferozepur Division. The petitioner held an L-14A license for retail liquor business, facing penalties under the Act. The Excise and Taxation Commissioner imposed an additional penalty of &8377; 4 lacs in the appeal, which the petitioner challenged. The key issue was whether the appellate authority had the power to enhance the penalty in such appeals.

The High Court clarified that the amount paid by the petitioner for availing the benefit of a stay order was not a penalty but a payment. Section 14 of the Punjab Excise Act allows appeals from excise officers' orders but does not grant the appellate authority the power to pass a more burdensome order than the one appealed against. The court highlighted that unless specifically conferred by statute, an appellate authority cannot grant relief in favor of the respondent by enhancing penalties. It compared this to provisions in the Customs Act, which explicitly allow for penalty enhancements by appellate authorities.

The judgment emphasized that the Punjab Excise Act does not confer the power to enhance penalties on the appellate authority. Therefore, the order imposing an additional penalty of &8377; 4 lacs was deemed without jurisdiction. Consequently, the court allowed the petition to quash the penalty imposition while clarifying that the order did not affect the &8377; 1 lac paid by the petitioner earlier.