2013 (2) TMI 565 - HC - VAT and Sales Tax

Penalty u/s 67 of the KVAT Act - assessee contested against non supply of rely upon documents to levy penalty - Held that - When documents are relied on against a person, that person should be given either the copies of the documents or at least that person should be given an opportunity to peruse the documents relied on. In so far as this case is concerned, Ext.P1 notice shows that several documents were relied on for proposing to levy penalty on the petitioner but despite the request made by the petitioner for giving copies of these documents, without even responding to the request made, the Officer has levied penalty on the petitioner by Ext.P3 order, thus penalty order. need to be set aside directing 2nd respondent to either furnish copies or allow the petitioner to peruse the documents relied on against him in Ext.P1 notice - in favour o0f assessee as directed.

Summary

Issues:
Challenge to penalty levied under Section 67 of KVAT Act based on lack of natural justice principles in document disclosure.

Analysis:
The judgment concerns the challenge against the penalty imposed on the petitioner under Section 67 of the KVAT Act. The petitioner received a notice, Ext.P1, proposing a penalty of Rs.69,270 based on various records. Subsequently, the petitioner requested copies of the documents relied upon in the notice but did not receive any response. Despite this, the penalty was levied through Ext.P3 order, prompting the petitioner to file a writ petition challenging the order.

The court emphasized the fundamental principle of natural justice, highlighting that when documents are used against an individual, that person should be provided with copies of the documents or at least given the opportunity to review them. In this case, the petitioner's request for copies of the relied-upon documents was ignored, and the penalty was imposed without fulfilling this requirement. The court deemed this action a violation of natural justice principles and set aside the Ext.P3 order levying the penalty.

As a result of the judgment, the court directed the 2nd respondent to provide the petitioner with copies of the documents mentioned in Ext.P1 notice or allow the petitioner to peruse them upon the production of a copy of the judgment. The petitioner was granted two weeks to respond to the notice after receiving the documents. Subsequently, the petitioner would be given an opportunity to be heard, and fresh orders on Ext.P1 would be issued. The petitioner was instructed to present a copy of the judgment and the writ petition to the 2nd respondent for compliance with the court's directives.