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2021 (2) TMI 498 - HC - VAT and Sales TaxLevy of penalty under Section 27(3)/27(4) of TNVAT Act - whether the First Appellate Authority could have admitted documents for the first time and as to whether there was an embargo under Section 63 of the Act? - HELD THAT - The finding recorded by the Tribunal that the documents could not be taken into consideration at the appellate stage is unsustainable. On facts, we find that the documents were not admitted by the First Appellate Authority for the first time, but the documents were already available on record. Upon perusal of the said documents, the First Appellate Authority found that the receipts did not relate to any sale. Therefore, the Tribunal did not go into the factual position to ascertain as to whether the First Appellate Authority admitted fresh documents or were the documents available on record even when the assessment was completed. This aspect has been clearly brought out by the First Appellate Authority in his orders dated 31.12.2014, which aspect has not been examined by the Tribunal. Hence, on the said score also, the petitioner - assessee is bound to succeed. Levy of penalty under Section 27(3) and (4) of the Act - HELD THAT - The levy of penalty under Section 27(3) of the Act arises for all the five years. However, the levy of penalty under Section 27(4) of the Act arises for the assessment years 2009-10 and 2010-11 alone. No specific ground was raised as to how the penalty was imposable. The First Appellate Authority granted relief to the assessee by setting aside the penalty, which was levied by the Assessing Officer. In doing so, the First Appellate Authority referred to Section 27(2) of the Act and held that the levy of penalty was provided under the said provision on the actual availing of input tax more than admissible input tax and found that the petitioner assessee reversed the input tax, which was availed owing to Section 19(20) of the Act much before finalization of the assessment. Therefore, the First Appellate Authority held that there was no excess availing of input tax and also reversal of input tax was not detected and not based on any suppression of fact or bogus claim - Ultimately, the penalty levied under Section 27(3)/27(4) of the Act was set aside. The Tribunal did not assign any reasons as to why the finding written by the First Appellate Authority setting aside the penalty was not justified. The Tribunal proceeded on the basis that during the VAT Audit, the assessment came to light and therefore, the willfulness on the part of the assessee was established. Any alleged admission before the Inspecting Authority cannot be put against the assessee because the Assessing Officer is an independent Authority, who will deal with the matter upon receipt of the report from the Inspecting Wing. Hence, it hardly matters as to what stand was taken by the assessee when the inspection was conducted. Accordingly, so far as the levy of penalty under Section 27(4) of the Act for the assessment year 2009-10 is concerned, the same cannot be sustained. The question, which arose for consideration namely as to whether Section 63 of the Act contemplates a total embargo on the First Appellate Authority or the Tribunal to admit documents is answered in favour of the petitioner/assessee - The other questions, which have been raised, are all factual in nature and as we have upheld the orders passed by the First Appellate Authority deleting penalty under Section 27(3)/27(4) of the Act as well as equal time addition, those questions do not arise for consideration. Revision allowed.
Issues Involved:
Challenging common order dated 07.1.2019 made by the Tamil Nadu Sales Tax Appellate Tribunal, Main Bench, Chennai under Section 60 of the Tamil Nadu Value Added Tax Act, 2006. Substantial questions of law raised included the correctness of reversing orders, assessment of tax on other income, sustaining penalties under various sections, and equal time addition. Analysis: 1. Section 63 of the Act: The Tribunal reversed the First Appellate Authority's decision based on Section 63 without considering the Explanation appended to the section. Several legal precedents were cited to establish that the First Appellate Authority had the jurisdiction to admit documents at the appellate stage. The Court found that the Tribunal's finding on Section 63 was unsustainable as the documents were already on record and not admitted for the first time by the First Appellate Authority. 2. Penalty under Section 27(3) and (4) of the Act: The First Appellate Authority set aside the penalty under Section 27(3) and 27(4) for various assessment years based on the absence of willful suppression or bogus claims. The Tribunal did not provide sufficient reasons for overturning this decision. The Court upheld the First Appellate Authority's decision and emphasized that the penalty under Section 27(4) was not leviable retrospectively for the assessment year 2009-10. The Court also noted that the penalty under Section 27(3) could not be sustained as the receipts did not relate to any sale. 3. Equal Time Addition: The First Appellate Authority's decision to set aside the equal time addition for a particular assessment year was confirmed by the Court. The Court found no grounds for considering the factual questions raised regarding penalties and equal time addition since the First Appellate Authority's orders were upheld. Conclusion: The Court set aside the common impugned order and allowed the tax case revisions in favor of the petitioner/assessee. The issues related to Section 63, penalties under Section 27(3) and (4), and equal time addition were thoroughly analyzed and decided in favor of the petitioner based on legal interpretations and factual considerations presented during the proceedings.
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