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TMI Blog2023 (1) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... not really qualify as suppression but that does not take the writ petitioner away from the rigour of penalty as Section 73 is available. Section 73 talks about tax that has not been paid or short paid and it excludes 'suppression of facts to evade tax' - In the instant case, penalty as regards purported suppression is only Rs.3890/- and if Section 73(9) is applied, it would become Rs.10,000/-. Writ petitioner would be worse off by filing the writ petition. Therefore, this writ Court deems it appropriate to leave it at that and say that interference is refused but it is made clear that it cannot be put against the writ petitioner that there is 'suppression of facts to evade tax' within the meaning of Section 74(1) and it is only a case of tax not being paid within the meaning of Section 73(1). In the considered view of this Court, this by no means fits into Section 126 in the light of Explanation thereat. Explanation thereat makes it clear that the tax liability or the amount of tax involved should be less than Rs.5,000/- or it should be a omission or mistake in documentation which is easily rectifiable in the same as an error apparent on the face of record. Subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aj, learned Additional Government Pleader (Taxes) [Revenue counsel] accepts notice on behalf of both the respondents, with the consent of both learned counsel, main writ petition was taken up and heard out. 5. A thumbnail sketch of facts will suffice. Short facts are that the writ petitioner is in the business of manufacturing Fibre glass composite moulded products; that the writ petitioner has been filing monthly returns under C-G ST as well as TN-G ST Acts; that the writ petitioner's place of business was inspected by Enforcement Wing Officials on 24.04.2019 followed by inspection on various dates, the last of the dates being 28.05.2019; that during the course of inspection, certain defects were noticed and an inspection report was made; that this pertains to 'Financial Year 2019-20' [hereinafter 'said FY' for the sake of convenience and clarity]; that there are three heads of defects and they are, (a)alleged sales suppression; (b) contravention of statutory provisions [3 in number being (i) non-maintenance of particulars of name/complete address of suppliers qua goods and services chargeable to tax; (ii) non-maintenance of particulars of name/complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of facts to evade tax' is the expression used. As the writ petitioner has time till 31.03.2021 to reconcile, it may not really qualify as suppression but that does not take the writ petitioner away from the rigour of penalty as Section 73 is available. Section 73 talks about tax that has not been paid or short paid and it excludes 'suppression of facts to evade tax'. Section 74(1) reads as follows: ' 74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-mis statement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that interference is refused but it is made clear that it cannot be put against the writ petitioner that there is 'suppression of facts to evade tax' within the meaning of Section 74(1) and it is only a case of tax not being paid within the meaning of Section 73(1). This drops the curtains on the first point. As regards the second point, the argument is that three non compliances qua statutory provisions should be treated as minor breach within the meaning of Section 126. To be noted, Sections 125 and 126 read as follows: ' 125.General penalty Any person, who contravenes any of the provisions of this Act or any rules made thereunder for which no penalty is separately provided for in this Act, shall be liable to a penalty which may extend to twenty-five thousand rupees.' ' 126.General disciplines related to penalty (1) No officer under this Act shall impose any penalty for minor breaches of tax regulations or procedural requirements and in particular, any omission or mistake in documentation which is easily rectifiable and made without fraudulent intent or gross negligence. Explanation : For the purpose of this sub-section, - (a) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n offences' provides for a particular penalty under sub-clause (iii) of sub-section (1), which reads as follows: ' 122.Penalty for certain offences (1) Where a taxable person who - (i) ... (ii) ... (iii) collects any amount as tax but fails to pay the same to the Government beyond a period of three months from the date on which such payment becomes due;' 11. In the considered view of this Court, this by no means fits into Section 126 in the light of Explanation thereat. Explanation thereat makes it clear that the tax liability or the amount of tax involved should be less than Rs.5,000/- or it should be a omission or mistake in documentation which is easily rectifiable in the same as an error apparent on the face of record. Subsection (6) makes it clear that Section 126 will not be attracted, when the penalty is expressed as a fixed percentage. In the case on hand, Section 122(1)(iii) read with Section 122(1) makes it clear that it is expressed in both units namely a fixed sum as well as a fixed percentage. On this ground also Section 126 does not come to the aid of the writ petitioner. To be noted, interest under 50(1) is not subject matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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