2016 (11) TMI 1077 - HC - VAT and Sales Tax

Penalty proceedings stayed pending appeal decision under M.P.V.A.T. Act for justice and clarity. .P.V.A.T.

Cox India Ltd. Versus Assistant Commissioner of Commercial Tax & others

The court kept penalty proceedings in abeyance until the appellate proceedings concluded, directing the notice for penalty proceedings to be held off ... Imposition of penalty - against the tax liability imposed, an appeal is already pending before the appellate authority and the appellate authority has stayed recovery of the tax amount as assessed, at this stage, initiation of the penalty proceedings is not permissible - Held that: - the fact remains that at the stage, when only a show-cause notice is issued for imposing penalty, the appeal itself may not be maintainable but without going into this aspect of the matter and keeping in view the orders passed in various cases, identical in nature, interest of justice would be met if further proceedings into the show-cause notice Annexure P-7 is directed to be kept in abeyance and liberty is granted to the department to proceed in accordance to law after the appellate proceedings come to an end, the department shall have liberty to initiate penalty proceedings, for the present, directing the respondents that the notice Annexure P-7 shall be kept in abeyance till decision on the appeal which is pending before the appellate authority, we dispose of this writ petition - petition disposed off. Issues involved: Challenging notice for penalty proceedings under Section 52 of the M. P. V. A. T. Act for the year 2012-13 when an appeal against tax liability is pending.Analysis:The petitioner filed a writ petition challenging a notice issued for penalty proceedings under Section 52 of the M. P. V. A. T. Act for the year 2012-13. The main contention was that since an appeal against the tax liability had already been filed and the appellate authority had stayed the recovery of the tax amount assessed, initiating penalty proceedings at this stage was not permissible. The petitioner cited judgments of the court in similar cases to support this argument, emphasizing the need to await the outcome of the appeal before initiating penalty proceedings.The respondent, represented by Shri Samdarshi Tiwari, objected to the petitioner's argument, suggesting that the issue could also be raised before the appellate authority. However, the court noted that when only a show-cause notice for imposing penalty had been issued, the appeal itself might not be maintainable. Despite this, considering previous orders in similar cases and to ensure justice, the court decided to keep the penalty proceedings in abeyance until the appellate proceedings concluded. The department was granted liberty to proceed with penalty proceedings after the appeal was resolved. The court directed that the notice for penalty proceedings be kept in abeyance until a decision was made on the pending appeal before the appellate authority, thereby disposing of the writ petition.Furthermore, the court directed the appellate board to expedite the decision on the appeal, emphasizing the need for a prompt resolution. With these directives and decisions, the petition was ultimately disposed of, providing clarity on the sequence of events regarding the appeal and penalty proceedings under the M. P. V. A. T. Act.