2021 (1) TMI 440 - HC - VAT and Sales Tax

Imposition of penalty under Income Tax Act - KVAT Act, 2003 - HELD THAT - The appeals, delay condonation petitions and the stay petitions preferred by the petitioner is liable to be considered and disposed of on merits before proceeding with the recovery of amounts in terms of the orders passed by the assessment authority. There will be a direction to the 2nd respondent appellate authority to take up consider and pass appropriate orders on Exhibits P2, P2(a) and P2(b) appeals, Exts.P3, P3(a) and P3(b) delay condonation petitions and Exts.P4, P4(a) and P4(b) stay petitions preferred by the petitioner and to dispose of the same in accordance with law at the earliest, at any rate, within six weeks from the date of receipt of a copy of this judgment. Till orders are passed, coercive proceedings on the basis of the original order shall be kept in abeyance.

Summary

Issues:
1. Imposition of penalty order under the Income Tax Act on a dealer registered under the Kerala Value Added Tax Act, 2003.
2. Appeals, delay condonation petitions, and stay petitions preferred by the petitioner.
3. Direction to the 2nd respondent appellate authority regarding the disposal of appeals and related petitions within a specified timeline.

Analysis:
1. The petitioner, a dealer registered under the Kerala Value Added Tax Act, 2003, was subjected to a penalty order under the Income Tax Act. The petitioner challenged this penalty order by filing appeals, delay condonation petitions, and stay petitions before the 2nd respondent appellate authority. Despite the penalty orders, demands were being raised, leading to the petitioner's grievance.

2. The High Court, after hearing arguments from both the petitioner's counsel and the standing counsel for the respondents, opined that the appeals, delay condonation petitions, and stay petitions filed by the petitioner should be considered and decided on their merits before any recovery actions are taken based on the assessment authority's orders. The Court emphasized the need for due consideration and disposal of the petitioner's petitions before proceeding with any coercive recovery measures.

3. Consequently, the High Court directed the 2nd respondent appellate authority to expeditiously address and pass appropriate orders on the appeals, delay condonation petitions, and stay petitions submitted by the petitioner. The Court mandated that these matters be resolved in accordance with the law within a stipulated period of six weeks from the date of receiving a copy of the judgment. Until the appellate authority issues its orders, any coercive actions based on the original penalty order were to be temporarily suspended to ensure fairness and procedural compliance.

In conclusion, the High Court's judgment focused on ensuring a fair and timely resolution of the petitioner's appeals and related petitions before any enforcement actions were pursued, emphasizing the importance of due process and legal considerations in such matters.