2019 (9) TMI 1146 - HC - VAT and Sales Tax

Imposition of penalty - petitioner has accepted the tax liability and remitted the same at the time of inspection itself - Deemed assessment - Section 22(2) of the TNVAT Act, 2006 - HELD THAT - It is not in dispute that the petitioner has filed their reply on 27.07.2016. However, the Assessing Officer proceeded to confirm the proposal for penalty without expressing his view as to whether not accounting two sale invoices was willful or deliberate, especially, when it is claimed by the petitioner that one of such invoices pertains to interstate transaction. This Court, at this stage, is not expressing any view on the merits of such claim made by the petitioner, as it is for the Assessing Officer to consider and decide the same. When penalty is sought to be imposed, the Assessing Officer has to specifically give finding that the sale suppression was willful and deliberate - Since I find that no such finding is given in this case, I am inclined to remit the matter back to the Assessing Officer to reconsider the issue with regard to penalty and pass orders after hearing the petitioner. Petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order for the year 2015-2016, imposition of penalty without proper justification.

Analysis:
The petitioner, a registered dealer in works contract, challenged an assessment order for the year 2015-2016, where the Enforcement Wing authorities inspected their business premises and found discrepancies in accounting. The petitioner had paid the tax liability during the inspection. However, a penalty was imposed later without clear justification. The petitioner contended that the Assessing Officer should provide independent reasoning for imposing the penalty, showing that any suppression was willful and deliberate. The respondent argued that since the petitioner admitted liability and paid the tax during inspection, the penalty was justified.

Upon reviewing the case, the court noted that the inspection revealed unaccounted sale invoices, and the petitioner had paid the tax liability promptly. Despite this, the Assessing Officer confirmed the penalty without explicitly stating if the suppression was willful or deliberate, especially considering one invoice pertained to an interstate transaction. The court emphasized that when imposing a penalty, the Assessing Officer must specifically find any suppression to be willful and deliberate. As such a finding was lacking in this case, the court decided to remit the matter back to the Assessing Officer for reconsideration and to provide the petitioner with a chance to be heard.

In conclusion, the court allowed the writ petition, setting aside the penalty order and instructing the Assessing Officer to review the penalty issue after hearing the petitioner. The Assessing Officer was directed to complete this review within six weeks from the date of the court's order. No costs were awarded, and connected miscellaneous petitions were closed.