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TMI Blog2023 (4) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act penalty may be imposed for failure to pay entry tax and furnish the return in due time, but the liability to pay penalty does not arise merely upon proof of default in filing return or failure to pay entry tax and furnish the return in due time. The Odisha Entry Tax Act being a new legislation and the petitioner being under the bona fide belief that the disputed goods is an un-scheduled goods and there being some confusion with regard to levy of entry tax on goods imported, being a new legislation, which is in a fluid state, no penalty should have been imposed - The cardinal principle of taxing statute is that when two views are possible, the view favourable to the assessee should be preferred and in that view of the matter no penalty should have been imposed on the petitioner. In view of the meaning attached to the word penalty under different provisions of different taxing statute, in an unequivocal term it can be said that the penalty ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute. In view of the fact that in the instant case the petitioner has already paid the tax and so far as pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re procured from the registered dealers from inside the State of Odisha. No entry tax was found to be paid on Charcoal, Carbon paste, Coke (imported), Hydrated lime, Molasses and other store materials. These were treated as non-scheduled goods by the petitioner. The assessing authority, while disposing the assessment, treated Charcoal, Coke (imported) and Hydrated lime which is chemical, to be scheduled goods. It was observed that Charcoal has not been excluded from the list of schedule goods prescribed under the O.E.T. Act. Thereby, the petitioner filed the revised return and paid 0.5% of entry tax on Charcoal. But, there was late payment of admitted tax which attracted penalty as per Section 11(2)(ii) to the tune of Rs.3,30,909.00. The Assessing Authority observed that the petitioner did not pay tax on purchase of imported Coke of an amount of Rs.10,73,07,311.00. Therefore, he levied entry tax @ 0.5% on the purchase turnover of imported Coke and penalty as per Section 7(5) of the O.E.T. Act. Again, he imposed entry tax @ 1% on Hydrated lime as a consumable with penalty as per Section 7(5) of the O.E.T. Act. Accordingly, a demand of Rs.14,35,281.00 was raised vide order of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the charging of entry tax on imported coke, when the dispute is pending for decision by the Larger Bench of the apex Court? (3) Whether on the facts and in the circumstances of the case, the order passed by the Sales Tax Tribunal is correct in law in confirming the imposition of penalty U/s. 7(5) of the O.E.T. Act by the first appellate authority? 4. Mr. S.P. Dalai, learned counsel appearing on behalf of Mr. P.K. Jena, learned counsel for the petitioner has contended that the petitioner does not want to press the questions of law, as have been formulated under point nos. 1 and 2, therefore, he has confined his argument to question no.3. He contended that the petitioner is not liable to pay the penalty under Section 7(5) of the O.E.T. Act, as the petitioner has already paid the tax in due time. Therefore, imposition of penalty under Section 7(5) of the O.E.T. Act by the Assessing Authority, which has been reduced by the First Appellate Authority by two lakhs, cannot have any justification. Therefore, the order passed by the Sales Tax Tribunal, so far as imposition of penalty under Section 7(5) of the O.E.T. Act is concerned, cannot be sustained in the eye o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax assessed, a penalty not exceeding one and half times the amount of tax due that was not disclosed by the dealer in his return. Which means, due to the non-disclosing of schedule goods in the return filed by the assessee, the Assessing Authority may also direct the dealer to pay, in addition to the tax assessed, a penalty not exceeding one and half times of the amount of tax due. But if the assessee satisfies the authority concerned that non-submission of statement/return was not with intention to facilitate the evasion of the entry tax, no penalty should be imposed. Section 7(5) has to be construed to mean that the presumption contained therein is rebuttable and the penalty of one and half times of tax assessed stipulated therein is only the maximum amount, which could be levied and the Assessing Authority has the discretion to levy lesser amount depending upon the facts and circumstances. In the absence of satisfaction, the presumption is that non-disclosure in the return is with an intention to evade payment of entry tax and, as such, depending on the facts of each case the Assessing Authority has to decide what would be the reasonable amount of penalty to be imposed. 9. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. In this context, the judgment rendered in Krishna Alloy Steels v. Registrar, TNTST, [2008] 13 VST 424 (Mad), is referred to wherein it has been held as follows:- The assessments made on the basis of the accounts, and not based on any other materials and were not estimates, had therefore, to be regarded as assessments made under section 12(1) to which the penal provisions of section 12(3) were not attracted. The levy of penalty for those two assessment years was liable to be set aside. 12. In Sri Krishna Electricals v. State of Tamil Nadu and another, [2009] 23 VST 249 (SC), it has been observed as follows: We find that the authorities have factually adjudicated the issues. In S. Durals case (1994)95 STC 372 (Mad) on which reliance was placed by the High Court to dismiss the writ petitions it was held that what was sold was in fact a complete wet grinder which was a new commodity and not merely parts thereof. The High Court has observed that the factual scenario was identical. The conclusions arrived at by the Revenue authorities and the High Court were that what was sold was a complete wet grinder which was a new commodity and not merely parts thereof. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the Act does not mean interest . It is imposed on the assessee who fails to pay tax in time and the quantum of the penalty increases with the delay. 17. In Karnataka Rare Earth v. Senior Geologist, Deptt. Of Mines Geology, (2004) 2 SCC 783 , the apex Court held that Penalty is a liability imposed as a punishment on the party committing the breach. 18. In Pratibha Processors v. Union of India, AIR 1997 SC 138 , the apex Court observed that penalty is ordinarily levied on an assessee for some contumacious conduct or for a deliberate violation of the provisions of the particular statute. 19. In Associated Cement Co. Ltd. v. Commercial Tax Officer, (1981) 4 SCC 578 , the apex Court held that penalty ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute. 20. In view of the meaning attached to the word penalty under different provisions of different taxing statute, as discussed above, in an unequivocal term it can be said that the penalty ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute. 21. In Maru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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