2017 (4) TMI 1114 - HC - VAT and Sales Tax

High Court Upholds VAT Penalties, Emphasizes Limited Jurisdiction

M/s. Shimla Automobile Pvt. Ltd. Versus State of H.P. and others

The High Court dismissed the revision petition challenging penalties imposed under sections 34 (2-A) and 34 (7) of the Himachal Pradesh Value Added Tax ... Imposition of penalty u/s 34 (7) of Himachal Pradesh VAT Act - one out of the six vehicles was neither declared electronically nor crossed through any of the multi purpose Barrier of the State - petitioner case is that in absence of any finding to the effect that the petitioner has attempted to evade the tax; the impugned order cannot be sustained - Held that: - the petitioner took no steps to explain or withdraw the admission by adducing clinching material so as to out way the admission and, therefore, learned first appellate authority committed no irregularity much less any illegality in dismissing the appeal by observing that respondent No.3 had imposed the penalty after following all the codal formalities - it was the representative of the petitioner who himself before respondent No.3 on 30.8.2013 had not only admitted his mistake but had expressed his readiness to pay the penalty imposed/due without seeking any more opportunity - petition dismissed - decided against petitioner. Issues:1. Revision petition under section 48 (1) of Himachal Pradesh Value Added Tax Act, 2005 challenging penalty levied against the petitioner.2. Assessment proceedings initiated by Deputy Excise and Taxation Commissioner-cum-Assessing Authority for non-declaration of vehicle.3. Appeal before Excise and Taxation Commissioner-cum-Appellate Authority and H.P. Tax Tribunal.4. Scope and ambit of revisional jurisdiction under section 48 of the Act.5. Admission of mistake by petitioner's representative and imposition of penalty.6. Contention regarding penalty under section 34 (7) of the Act.7. Merits of the petitioner's argument and dismissal of the revision petition.Detailed Analysis:1. The revision petition was filed against the decision of the Himachal Pradesh Tax Tribunal upholding the penalty under section 34 (7) of the Himachal Pradesh Value Added Tax Act, 2005, while setting aside the penalty under section 34 (2-A). The petitioner challenged the decision on the grounds of tax evasion.2. The petitioner, registered under the Act and Central Sales Tax, faced assessment proceedings initiated by the Deputy Excise and Taxation Commissioner for non-declaration of a vehicle during transportation, leading to penalties being imposed.3. Appeals were made before the Excise and Taxation Commissioner-cum-Appellate Authority and the H.P. Tax Tribunal, where the penalty under section 34 (2-A) was removed, but the penalty under section 34 (7) was upheld.4. The judgment discussed the scope and ambit of the revisional jurisdiction under section 48 of the Act, emphasizing that the High Court would intervene only in matters involving questions of law arising from erroneous decisions or failure to decide a legal issue.5. The admission of mistake by the petitioner's representative played a crucial role in the imposition of penalties, as evidenced by the representative's acknowledgment of the error and willingness to pay the penalty without contest.6. The petitioner argued against the penalty under section 34 (7) of the Act, claiming that there was no attempt to evade tax, but the court found no merit in this argument due to the clear admission of mistake by the petitioner's representative.7. Ultimately, the court dismissed the revision petition, stating that the findings were factual, and no legal question warranted consideration, thereby upholding the penalties imposed and leaving the parties to bear their own costs.