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TMI Blog2024 (1) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... d to impose under Section 27(4) simply, because show cause notice was issued under Section 22(2) the respondent cannot impose 300% penalty, retrospectively, by invoking Section 27(2) of the Act. Moreover, there must be a finding that wrong availment of ITC are produced false bills etc. The absence of such finding, the respondent lapsed jurisdiction for which the Judgment relied earlier i.e.(earlier Judgment) is applicable. In the present case also the respondent have not rendered the such finding. In such circumstances, invoking section 27(4) read with 27(2) penalty cannot be imposed. Moreover, penalty cannot be imposed automatically. Some criminalities ought to be in existence to impose penalty and the framing of proof required for imposition of penalty is different from and much higher than i.e., required for the purpose of framing the best Judgment demand assessment. Therefore, the impugned orders cannot be sustained. Hence the impugned orders are quashed. Petition allowed. - Honourable Mrs. Justice S. Srimathy For the Petitioner : Mr.N.Inbarajan For the Respondent : Mr.A.K.Manikkam, Special Government Pleader COMMON ORDER W.P(MD)No.16025 of 2022 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: (a). Reversal of ITC treating sales turnover of exempted sales to Canteen Stores Department as exempted sales of goods covered under Section 15 of the Act. (b) Reversal of ITC as per the return were not taken into consideration more particularly relating to purchase return. (c) There is no finding of any wrong availment of ITC or producing false bills etc. which is mandatory for the levy of penalty under Section 27(4) of the Act. (d) Penalty under Section 27(4) of the Act for the year 2012-2013 was imposed at 300% of the tax due which was substituted by Act 13 of 2015 effective from 29.01.2016 and therefore such imposition of penalty is without authority of law. (e) Penalty under Section 27(3) was imposed without any finding and was determined on the turnover disclosed in the books of account return and from WW for which also there is no jurisdiction to levy penalty under Section 27(3) of the Act. (f) Only for the first time a turnover of Rs. 48,86,708/-was taken into consideration for the purpose of levy of penalty under Section 27(3) of the Act which was not reflected in the earlier proceedings dated 07.04.2016. (g) Penalty has been imposed without any fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal 1 Stock Transfer Rs. 6,73,52,784/- Rs. 13,18,540/- 2 Interstate sale with C Form Rs. 90,64,727/- Rs. 8,57,707/- 3 Interstate sale without C Form Rs. 92,32,405/- Rs. 8,73,573/- On verifying the arrear demand and the subsequent modification it would be cleared that after due consideration of the petitioner's reply with the supportive valid documents, the above ITC reversal is confirmed as it is pertaining to the wrongly availed Input Tax Credit which was availed by them vide local purchase and utilised for interstate sales. Hence, the related penalty under Section 27(4) of the Act, is bound to be paid by the petitioner. With respect to the percentage of penalty under Section 27(4) of the Act, 300% is imposed on the above ITC reversal as they have not paid the wrongly availed Input Tax Credit. Also only after 29.01.2016 [date of amendment of the Section 27(4) of the Act] assessment order for the year 2012-2013 has been passed on 07.04.2016. Hence, penalty impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention of the explanations were totally ignored cannot be accepted. Moreover, the petitioner has not preferred an appeal before the Appellate Forum. Therefore, the filing of writ petition is not maintainable. Hence, the respondent prays to dismiss the writ petition. 12. The petitioner had filed re-joinder affidavit and stated that there is no jurisdiction to invoke Section 27(4) of the Act, by stating that there is wrong availment of ITC. As stated earlier, there is no wrong availment of ITC at all and in those circumstances imposing penalty is not maintainable. It is further stated that with regard to the averment on the limitation aspect in invoking Section 27(3) and 27(4) of the Act, the petitioner submitted that the respondent in their counter affidavit stated that the period of pendency of writ petition has to be excluded for the calculation of time limit to initiate proceedings under Section 27 of the Act. The petitioner reiterates that even as per the proceedings, dated 07.04.2016, the penalty under Section 27(2) of the Act was not proposed and imposed along with the statutory form RR. It is further submitted that even after the direction of this Court, dated 08.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t so as to justify such imposition. 10. The mere fact that the assessment was made to the best of judgment of the authority would not be sufficient for the imposition of penalty, as the degree of proof required for imposition of penalty is quite different from, and much higher, than that required for the purpose of framing a best judgment assessment. 11. It is the above decision that had persuaded the subsequent Full Bench in the case of Golden Homes (supra) to conclude likewise. In Golden Homes, the Bench had specifically noted that the books of accounts maintained by that dealer, reflected payments that had not been disclosed to tax, and thus, it could not be said that there had been non-disclosure or suppression by the assessee. 12. Furthermore, there was no finding recorded by the assessing authority specific to the position that the escapement of turnover was as a result of wilful non-disclosure or suppression by the assessee concerned. This would also vitiate the levy of penalty. 13. The aforesaid decision in the case of Kathiresan (supra) does not appear to have been cited before the Bench in the case of Vijay Steels (supra). To be noted, that the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing for the petitioner, even if the respondent is intended to impose the penalty under Section 27(4), then a show cause notice ought to be issued to impose under Section 27(4) simply, because show cause notice was issued under Section 22(2) the respondent cannot impose 300% penalty, retrospectively, by invoking Section 27(2) of the Act. Moreover, there must be a finding that wrong availment of ITC are produced false bills etc. The absence of such finding, the respondent lapsed jurisdiction for which the Judgment relied earlier i.e.(earlier Judgment) is applicable. 18. In the present case also the respondent have not rendered the such finding. In such circumstances, invoking section 27(4) read with 27(2) penalty cannot be imposed. Moreover, penalty cannot be imposed automatically. Some criminalities ought to be in existence to impose penalty and the framing of proof required for imposition of penalty is different from and much higher than i.e., required for the purpose of framing the best Judgment demand assessment. Therefore, the impugned orders cannot be sustained. Hence the impugned orders are quashed. 19. Accordingly, these Writ Petitions are allowed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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