Strict construction of penalty provisions bars use of the VAT Act for non-registration under the 2011 levy scheme.

Penal liability for failure to register under the Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adhiniyam, 2011 had to be governed by the special penalty mechanism in section 10(3) of that Act, because the duty to register and the consequence of default were created within the 2011 scheme itself. Section 8 made the VAT Act applicable only subject to the 2011 Act, so the general penalty provision in section 20(6) of the Madhya Pradesh Value Added Tax Act, 2002 could not displace the later, specific enactment. On strict construction of taxing and penal provisions, a wider penalty power could not be inferred. The penalty orders were therefore set aside and reconsideration was directed under section 10(3).

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Issues: Whether penalty for non-registration under the Madhya Pradesh Vilasita, Manoranjan, Amod Evam Vigyapan Kar Adhiniyam, 2011 could validly be imposed under section 20(6) of the Madhya Pradesh Value Added Tax Act, 2002 instead of under section 10(3) of the 2011 Act.

Analysis: The liability to obtain registration and the consequence of failure to do so were created by the 2011 Act itself. Section 10(3) specifically provided the penalty for non-compliance with the registration requirement. Section 8 of the 2011 Act made the VAT Act applicable only subject to the provisions of the 2011 Act, so the general penalty provision in section 20(6) of the VAT Act could not override the special scheme of the later enactment. Applying the rule of strict construction to taxing and penal provisions, the authorities could not infer a wider penalty power where the statute did not expressly confer it.

Conclusion: The invocation of section 20(6) of the Madhya Pradesh Value Added Tax Act, 2002 for non-registration under the 2011 Act was impermissible. The penalty orders were set aside and the matter was sent back for consideration under section 10(3) of the 2011 Act.

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