2020 (1) TMI 578 - HC - VAT and Sales Tax

Waiver of penalty - wilful non-disclosure of turnover - petitioner has not responded to the notice - HELD THAT - The impugned attachment order is against the present petitioner/appellant M/s.Supreme Dyechem Pvt ltd., represented by its Director Mr.Mohan Prasath J, who is related to Mr.G.Jayabal, Sole Proprietor, M/s.Supreme Chemical Industries, who are father and son. Therefore, the learned Single Judge has disposed of the present writ petition filed by the petitioner / appellant company with certain directions to deposit certain amounts under the garnishee proceedings initiated against the present appellant company. The garnishee proceedings now cannot sustain and the penalty in question itself has been set aside and matter stands remanded to the Assessing Authority. - the present writ appeal is disposed of as rendered infructuous.

Summary

Issues involved:
1. Challenge to penalty order for Assessment Year 2014-15
2. Validity of imposition of penalty for wilful non-disclosure of turnover
3. Remand of the matter to the Assessing Officer for fresh consideration
4. Disposal of writ petition in relation to attachment order and garnishee proceedings

Analysis:

1. The appellant, M/s. Supreme Chemical Industries, represented by Mr. G. Jayabal, challenged the penalty order for Assessment Year 2014-15 amounting to ?11,05,037 through Writ Petition No.27119 of 2019. The Single Judge allowed the petition on 13.09.2019, setting aside the penalty order, rendering the present Writ Appeal against the Single Judge's order dated 08.08.2019 infructuous.

2. The Single Judge's order highlighted that the Assessing Officer proposed tax, interest, and penalty for the relevant assessment year. While the petitioner had discharged tax and interest liabilities, the dispute revolved around the imposition of penalty for wilful non-disclosure of turnover. The Single Judge emphasized the necessity of a specific finding by the Assessing Officer to levy such a penalty. As no such finding was made, and considering the petitioner's compliance with tax and interest payments, the Single Judge allowed the Writ Petition, setting aside the penalty order and remanding the matter to the Assessing Officer for fresh consideration.

3. The impugned attachment order targeted the present petitioner, M/s. Supreme Dyechem Pvt Ltd., represented by Mr. Mohan Prasath J, who is related to Mr. G. Jayabal, the Sole Proprietor of M/s. Supreme Chemical Industries. The Single Judge disposed of the writ petition related to this attachment order with directions for the appellant company to deposit certain amounts under garnishee proceedings. However, with the penalty order being set aside and the matter remanded to the Assessing Authority, the garnishee proceedings were deemed unsustainable, leading to the disposal of the present writ appeal as infructuous.

4. Consequently, the writ appeal was disposed of with no costs incurred, and the connected miscellaneous petition was closed. The judgment emphasized the importance of proper findings and due process in imposing penalties, ensuring fair treatment and opportunities for the concerned parties in tax assessment matters.