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TMI Blog2011 (12) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty cannot be sustained. Thus the orders passed by the authorities imposing penalty on the petitioners are not in accordance with the law laid down by the apex court in Hindustan Steel Ltd. [1969 (8) TMI 31 - SUPREME Court] and Anantharam [1980 (4) TMI 2 - SUPREME Court] and accordingly both the orders are not sustainable under the law and are quashed. - W.P. Nos. 3783, W. P. Nos. 3785, W. P. Nos. 3798 of 2004 - - - Dated:- 1-12-2011 - KRISHN KUMAR LOHOTI AND SMT. VIMALA JAIN JJ. H.S. Shrivastava, Senior Advocate with Sandesh Jain for the petitioners Vivek Agrawal, Government Advocate, for the respondents ORDER This order shall decide W.P.No. 3798 of 2004 (M/s. Shri Ram Traders v. Divisional Deputy Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n April 30, 2001. The account books and the papers which were seized were not tallying with the account books earlier produced by the assessee, so assessment was not possible on such account book and treating that the assessee had evaded the tax, best judgment assessment order was passed. The assessing officer had also found that certain entries in the account books and loose papers were not explained by the assessee and the assessment order was framed against the petitioners by which the sale was enhanced, assessed at ₹ 3,45,829 and commercial tax was imposed. Against the order, annexure P1, an appeal was preferred by the assessee which was decided vide order, annexure P4, dated June 25, 2004. The appeal allowed partly and by reducin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pp SCC 13 and submitted that the aforesaid penalty orders may be quashed, as the authorities had failed to record the aforesaid finding. That the petitioners were dealing mostly in the tax-paid goods and in this regard he has referred various orders in which it was held that the petitioners were dealing with the tax-paid goods and the taxable goods were of very small amount. Shri Vivek Agrawal, learned Government Advocate appearing submitted that in view of the specific provision as contained in section 69(2) of the Act, the assessing officer rightly initiated the proceedings for imposition of penalty after issuing a notice and extending an opportunity of being heard. The petitioners had wilfully remained absent in response to the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such proceeding or within such further time as allowed by the State Government, directing the dealer that in addition to the tax payable by him, pay by way of penalty a sum which shall not be less than three times but shall not exceed five times of the amount of tax evaded. The apex court in Hindustan Steel Ltd. [1970] 25 STC 211 (SC); [1969] 2 SCC 627, considering the question of imposition of the penalty held that an order imposing penalty for failure to carry out a statutory obligation is the result of quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged has either acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct, or acted in conscious disregard of its obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 696 (SC). Now in the light of the law laid down by the apex court in Hindustan Steel Ltd. [1970] 25 STC 211 (SC); [1969] 2 SCC 627 and Anantharam [1980] 123 ITR 457 (SC); [1980] Supp SCC 13, the orders passed by the authorities may be looked into. By order, annexure P2, the assessing officer found that the assessee furnished incorrect return of the sales tax, evaded the tax on the basis of which assessing officer assessed for the additional tax and on this ground the penalty was imposed, and except this, no finding was recorded even by the revisional authority that there was deliberate concealment of sale or the assessees were guilty of contumacious or dishonest conduct, or acted in conscious disregard of its obligation, failing which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Anantharam [1980] 123 ITR 457 (SC); [1980] Supp SCC 13. As the matters are old one , the authority is expected to decide the matter expeditiously, as far as possible within a period of six months from the date of communication of this order. Before passing the order of penalty, the assessing officer shall issue a fresh notice to the petitioners by extending an opportunity of hearing. While dealing the matter, the assessing officer shall also consider the fact that whether the petitioners were dealing in the tax-paid goods and the taxable goods were of small amount and the amount of penalty can be based on the aforesaid facts also. Any amount deposited by the petitioners in compliance with the penalty order shall be subject to final d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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