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2017 (2) TMI 706 - HC - VAT and Sales TaxImposition of penalty u/s 22(5) of the 2006 Act - Held that - the amount demanded towards penalty, as indicated in the impugned order, is not in consonance with the provisions of Section 22(5) of the 2006 Act - impugned order set aside - respondent will re-assess the amount payable by the petitioner towards penalty - petition allowed by way of remand.
Issues: Challenge to assessment order for Assessment Year 2009-2010 under Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006. Imposition of penalty under Section 22(5) of the 2006 Act.
Analysis: 1. Assessment Order Challenge (Section 22(4) of the 2006 Act): The petitioner challenged the assessment order dated 14.08.2015 for the Assessment Year 2009-2010 on the grounds of failure to file returns. The respondent passed the impugned order based on a best judgment assessment under Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006. Prior to the order, the petitioner was served notices proposing tax and penalty imposition. The petitioner, aggrieved by the order, approached the High Court through a writ petition. 2. Imposition of Penalty (Section 22(5) of the 2006 Act): The main contention in the petition was the imposition of penalty under Section 22(5) of the 2006 Act. The petitioner argued that the penalty should be imposed at the rate specified in the section, i.e., 150%, but only on the difference between the tax assessed and the tax already paid by the assessee. The respondent's calculation of penalty in the impugned order was challenged as not in line with the provisions of Section 22(5). The figures in the order showed a discrepancy in the penalty amount demanded, which did not align with the statutory requirements. 3. Court Decision and Directions: The High Court set aside the impugned order to the extent of the penalty levy, as it was the only aspect challenged by the petitioner. The respondent was directed to re-assess the penalty amount payable by the petitioner in accordance with Section 22(5) of the 2006 Act. The writ petition was disposed of based on this direction, with no order as to costs. The pending application was also closed as a result of the judgment.
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