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Issues: (i) whether the assessment order was liable to be quashed in writ jurisdiction despite the availability of an appellate remedy; (ii) whether penalty could be sustained under section 53(3) of the Andhra Pradesh Value Added Tax Act, 2005 in the absence of a finding of under-declaration caused by fraud or wilful neglect.
Issue (i): whether the assessment order was liable to be quashed in writ jurisdiction despite the availability of an appellate remedy.
Analysis: The challenge to the assessment turned largely on disputed facts relating to tax liability, alleged under-valuation, and deficit payment. The order was passed after notice and objections, and the assessee had an efficacious statutory remedy by way of appeal. In such circumstances, writ interference with the assessment itself was not warranted.
Conclusion: The assessment order was not quashed, and the assessee was left to pursue the available alternate remedy.
Issue (ii): whether penalty could be sustained under section 53(3) of the Andhra Pradesh Value Added Tax Act, 2005 in the absence of a finding of under-declaration caused by fraud or wilful neglect.
Analysis: Section 53(3) permits penalty equal to the tax under-declared only where under-declaration is established to have resulted from fraud or wilful neglect, and only after a reasonable opportunity of being heard. The notice and the impugned order contained no finding that the under-declared tax was attributable to fraud or wilful neglect. The prescribed form could not override the statutory conditions. On that basis, the levy of penalty was unsustainable.
Conclusion: The penalty was quashed as being without jurisdiction.
Final Conclusion: The writ petition succeeded only in respect of the penalty component, while the assessment was left undisturbed, with liberty to the authority to proceed afresh in accordance with law.
Ratio Decidendi: Penalty for under-declared tax can be imposed only on a recorded finding of fraud or wilful neglect and after affording a reasonable opportunity of hearing; a prescribed form cannot dispense with these statutory preconditions.
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