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Penalties imposed under s. 15-B of the WT Act on a legal heir for defaults committed by the deceased, Reduction of penalties by the AAC, Applicability of penalty rates as per the law on the date of default or assessment, Imposition of penalty on a legal representative under s. 15-B, Quantum of penalty based on the date of filing returns vs. amended Act. Analysis: 1. The judgment pertains to penalties imposed under s. 15-B of the WT Act on a legal heir for defaults committed by the deceased. The appellant, a legal heir, contested the penalties imposed after the death of the deceased, arguing that the legal heir should not be held liable for the deceased's defaults. The penalties were imposed based on the returns filed by the deceased before her death, with no tax paid as required under s. 15-B. The WTO rejected the objection and imposed the penalties. 2. The AAC reduced the penalties imposed on the legal heir, directing to impose them at a rate of 2% per month or 50% of the tax, whichever was less, based on the date of filing returns. The legal representative argued that penalties on a legal heir are illegal and excessive, especially when imposed at rates applicable after a certain date. 3. The Departmental Representative contended that penalties should be imposed based on the law applicable at the time of assessment, citing a Supreme Court decision. The legal counsel for the assessee argued that penalties should be based on the law at the time of default and not the assessment date, distinguishing the present case from the Supreme Court decision. 4. The cross objections raised the argument that no penalty can be imposed on a legal heir under s. 15-B. Various decisions were cited to support this argument, emphasizing that penalties on legal representatives for defaults committed by the deceased are not permissible under the law. 5. The Tribunal analyzed the provisions of the WT Act, specifically s. 19(3), which restricts the application of certain sections on legal representatives. It was noted that s. 15-B does not enable the imposition of penalties on legal heirs, and the obligation to explain defaults lies with the person who committed the infringement, not the legal representative. The Tribunal agreed that penalties should not be imposed on a legal representative under s. 15-B. 6. The Tribunal further discussed the quantum of penalty, highlighting the Supreme Court's ruling that penalties should be based on the law at the time of assessment, subject to certain conditions. It was emphasized that any amendment enhancing penalties for defaults committed prior to the amendment is impermissible. In this case, the Tribunal upheld the AAC's decision to impose penalties at a maximum of 50% of the tax, based on the date of filing returns and not the amended Act. 7. In conclusion, the Tribunal dismissed the department's appeals and allowed the cross objections of the assessee, affirming that penalties on legal heirs under s. 15-B are not permissible and penalties should be determined based on the law at the time of default, not the assessment date.
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