9911796707
TMI Blog2022 (12) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... V No. 47 of 2015 by the Petitioner-Assessee arises from an order dated 22nd August, 2015 passed by the Odisha Sales Tax Tribunal, Cuttack (Tribunal) in S.A. No.154(V) of 2014-15 for the period 1st April, 2007 to 30th June, 2010 whereby the Tribunal dismissed the Assessee's appeal against the order dated 19th August, 2014 of the Additional Commissioner Sales Tax, North Zone (Addl. CST) reducing the assessment from Rs.96,67,096/- to Rs.7,56,975/- including penalty under Section 42 (5) of the Orissa Value Added Tax Act, 2004 (OVAT Act). 3. STREV No.33 of 2016 arises from the order dated 27th February, 2016 of the Tribunal dismissing the Petitioner's S.A. No.158(V) of 2014-15 for the period 1st April, 2005 to 31st March, 2007. By the said impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner and if so adjusted the tax due would be 'NIL'. The 1st Appellate Authority, however, rejected this contention and treated the disallowed ITC as tax due/tax payable and thereupon imposed penalty under Section 42 (5) of the OVAT Act. The contention of the Petitioner that no penalty under Section 42(5) of the OVAT Act can be imposed for disallowance of ineligible ITC when the surplus ITC is available with the Petitioner-Assessee was rejected by both the First Appellate Authority as well as the Tribunal. 8. In the above context of Section 42 (5) of the OVAT Act, it was contended by Mr. Kurmy, learned counsel for the Petitioner, that on the strength of the judgment of this Court in Jindal Stainless Limited v. State of Odisha (201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT Act talks of 'audit assessment' and reads as under: "42. Audit assessment. - (1) Where the tax audit conducted under subsection (3) of section 41 results in the detection of suppression of purchases or sales or both, erroneous claims of deductions including input tax credit evasion of tax or contravention of any provision of this Act affecting the tax liability of the dealer, the assessing authority may, notwithstanding the fact that the dealer may have been assessed under section 39 or section 40, serve on such dealer a notice in the form and manner prescribed along with a copy of the Audit Visit Report, requiring him to appear in person or through his authorised representative on a date and place specified therein and produce or ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the said subsections. (6) Notwithstanding anything contained to the contrary in any provision under this Act, an assessment under this section shall be completed within a period of six months from the date for receipt of the Audit Visit Report: Provided that if, for any reason, the assessment is not completed within the time specified in this sub-section, the Commissioner may, on the merit of each such case, allow such further time not exceeding six months for completion of the assessment proceeding. (7) No order of assessment shall be made under sub-section (3) or sub-section (4) after the expiry of one year from the date of receipt of the Audit Visit Report." 11. In Jindal Stainless Limited (supra) while upholding the const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the basis of the tax assessed. No discretion is left with the Assessing Officer for levying any lesser amount of penalty. Therefore, even if further opportunity will be given to the assessee before imposing penalty that will be a futile exercise. Penalty is not independent of the tax assessed. If the tax is assessed, imposition of penalty under 42(5) is warranted. xx xx xx 35. In view of the above, we are of the considered view that Section 42(5) of the OVAT Act authorizing imposition of penalty equal to twice the amount of tax assessed under Section 42(3) or (4) of the OVAT Act is constitutionally valid. It is not arbitrary, unreasonable, oppressive, or hit by Article 14 or in any way ultra vires the Constitution of India." 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 43(2) of the OVAT Act. This was what explained by this Court in M/s. National Aluminium Company Limited (supra)." 14. Consequently, as far as this Court is concerned, the consistent view is that the penalty under Section 42(5) OVAT Act is straightway attracted once the determination of the tax payable takes place pursuant to an audit assessment under Section 42 of the OVAT Act. 15. The contention of the Petitioner that upon adjustment of the ineligible ITC from the surplus ITC available, no tax would be due is to no avail since the treatment by the 1st Appellate Authority of the surplus ineligible ITC as tax due by the Petitioner has affirmed by the Tribunal and no question in that regard has been framed by this Court. 16. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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