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2022 (5) TMI 1020 - HC - GSTReview of order - Levy of penalty - grounds for review are that the imposition of penalty by the authorities is not automatic and the same can be imposed only when there is a fraud or willful intention to defraud the revenue - HELD THAT - It is clear that the argument that was advanced at the time of hearing of the Writ Petition was with regard to inclusion of VAT regime for the purpose of deciding the tax to be paid under Section 10(1) of GST Act. In the Review Petition, it is now urged that Section 10 encompasses Section 73 and 74 of GST as well and in the absence of any fraud, the authorities erred in invoking Section 74 of the GST Act and imposing 100% penalty. The averments in the affidavit filed in support of the Writ Petition does not anywhere refer to the plea now taken, though such plea was available at the time of filing of the Writ Petition, more so, when it involves only interpretation of the provisions of GST. Without taking such plea, namely, that 100% penalty can be imposed only when there is fraud or willful concealment, in the Review Application such a plea is sought to be raised. It is not as if that such a plea was not available at the time filing of the Writ Petition. The order under review would clearly indicate that intentional and willful non-disclosure of crucial facts can be inferred from the self-declaration made in the web-portal - there are no grounds to interfere with the order impugned in the review - the Review application is dismissed.
Issues Involved:
1. Imposition of penalty under Section 74 of the GST Act. 2. Interpretation of "preceding financial year" under Section 10(1) of the GST Act. 3. Scope of review under Order XLVII Rules 1 and 2 read with Section 114 of the Code of Civil Procedure, 1908. Detailed Analysis: 1. Imposition of Penalty under Section 74 of the GST Act: The petitioner argued that the imposition of a 100% penalty under Section 74 of the GST Act is not automatic and should only be applied in cases of fraud or willful intention to defraud the revenue. The petitioner contended that there was no finding of fraudulent intention in the original rejection order dated 19.09.2018, which was confirmed on appeal on 12.02.2020. The petitioner sought a reduction of the penalty under Section 73 of the GST Act, which imposes a lesser penalty in non-fraudulent cases. The court, however, upheld the authorities' decision, noting that the option exercised by the petitioner was self-declaratory and required verification. The court found that the authorities acted within their rights to impose the penalty after determining the option was incorrect. 2. Interpretation of "Preceding Financial Year" under Section 10(1) of the GST Act: The court examined whether the "preceding financial year" mentioned in Section 10(1) of the GST Act refers to the financial year under the VAT regime. The petitioner argued that the turnover from 1.7.2017 should be considered, excluding the previous VAT regime turnover. The court, however, held that for the financial year 2017-2018 under the GST regime, the preceding financial year would be 2016-2017 under the VAT regime. The court emphasized that the GST Act was introduced as a substitute for the VAT Act to maintain uniformity and that the turnover of the preceding financial year under the VAT regime must be considered for extending benefits under the GST regime. 3. Scope of Review under Order XLVII Rules 1 and 2 read with Section 114 of the Code of Civil Procedure, 1908: The court reiterated the limited scope of review, emphasizing that it cannot be used to reargue the case or correct an erroneous decision unless there is an error apparent on the face of the record. The court cited several precedents, including Haridas Das v. Usha Rani Banik and Gopal Singh v. State Cadre Forest Officers Association, to outline the principles governing the review jurisdiction. The court noted that the petitioner did not raise the argument regarding the imposition of 100% penalty under Section 74 in the original writ petition, and such a plea could not be introduced in the review application. The court concluded that there was no error apparent on the face of the record to justify a review and dismissed the review application. Conclusion: The court dismissed the review application, upholding the imposition of the penalty under Section 74 of the GST Act and affirming the interpretation that the "preceding financial year" includes the turnover under the VAT regime for the financial year 2017-2018. The court also reinforced the limited scope of review under the Code of Civil Procedure, emphasizing that it cannot be used to reargue the case or correct non-apparent errors.
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