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2024 (1) TMI 930 - HC - VAT and Sales TaxValidity of demand of VAT and penalty - suppression of the sales/stock difference - use of tracing paper - Validity of proceedings under Section 29 of the HVAT Act - requirement to issue notice in the Form VAT-N3 - HELD THAT - The said form gives the format of the penalty, which is proposed to be levied under Section 38 of the Act. It is after a proper due opportunity and the assessment having been done and thereafter penalty is levied under Section 38 of the HVAT Act, which is three times as per the requirement. The order dated 12.01.2016 (Annexure A-2), therefore, is apparently passed by the Joint Excise and Taxation Commissioner (Appeals), Faridabad, and the Tribunal has rightly dismissed the appeal as noticed above after recording the affirmed findings that the penalty under Section 38 of the HVAT Act has been levied. The question as such sought to be raised that proceedings were under Section 29 of the HVAT Act is without any substance keeping in view that notice under Section 38 of the HVAT Act was issued and the assessee failed to respond to the same. There are no substantial question of law arises for consideration in the peculiar facts and circumstances of the case - appeal dismissed.
Issues:
The appeal challenges the order of the Haryana Tax Tribunal dismissing the appeal filed by the assessee under the Haryana Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956. The Tribunal found evidence of suppression of sales/stock difference and rightly levied tax penalty under both Acts. Issue 1: Challenge to Tribunal's Order The appeal challenges the order of the Haryana Tax Tribunal, which dismissed the appeal filed by the assessee under the Haryana Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956. The Tribunal held that the assessee did not respond to the show cause notice pointing out discrepancies and suppression of sales, leading to the dismissal of the appeal. Issue 2: Tax Penalty Imposition The Tribunal found evidence of the use of tracing paper and suppression of sales/stock difference during physical verification, leading to the rightful imposition of tax penalty under both the Haryana Value Added Tax Act and the Central Sales Tax Act. The penalty amount was assessed at Rs. 5,51,895/-, corrected from Rs. 5,61,895/-, being three times the tax amount of Rs. 1,83,965/- as per Section 38 of the HVAT Act. Issue 3: Legal Proceedings The Tribunal's order was passed under Section 38 of the Haryana Value Added Tax Act read with Section 9 (2) of the Central Sales Tax Act. The inspection of premises was conducted under Section 29 of the HVAT Act, and the show cause notice was issued under Section 38 of the HVAT Act. The arguments that the proceedings were under Section 29 of the HVAT Act were deemed unsubstantial. Issue 4: Penalty Notice Rule 31 of the HVAT Rules, 2003 mandates serving a notice in Form VAT-N3 to show cause before imposing a penalty. The format of the penalty proposed to be levied under Section 38 of the Act is specified in the notice. The penalty is imposed after proper assessment and opportunity, as per the requirement of three times under Section 38 of the HVAT Act. Conclusion: The High Court found no substantial question of law in the case and dismissed the appeal for lacking merit in the peculiar facts and circumstances presented. The Tribunal's decision to levy tax penalty under the Haryana Value Added Tax Act and the Central Sales Tax Act was upheld, emphasizing the importance of responding to show cause notices in legal proceedings.
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