2019 (4) TMI 651 - HC - VAT and Sales Tax

Appeals allowed, orders set aside, matter remanded for fresh consideration on penalty imposition under tax laws

The High Court of Punjab and Haryana allowed the appeals (VATAP Nos. 299 and 300) filed by an entity under Himachal Pradesh Tourism Development ... Maintainability of appeal - noncompliance of Section 63(3) of the PVAT Act, 2005 - Imposition of penalty u/s 11(6) of the Punjab General Sales Tax Act, 1948 - repealed act - Held that:- In the assessment order passed by the assessing authority, reference has been made to Section 11(5) of the Madhya Pradesh Sales Tax Act, while relying upon decision of the Division Bench in Battulal's case [1962 (5) TMI 19 - MADHYA PRADESH HIGH COURT], whereas it was Section 11(5) of the Central Provinces and Berar Sales Tax Act, 1947 which was under consideration in the said decision. In pursuance to the assessment order dated 27.12.2010, the penalty had been imposed vide order dated 30.5.2011 which had been affirmed by the DETC (A) and the Tribunal - The Division Bench judgment of the Madhya Pradesh High Court in Battulal's case having been overruled by the Full Bench decision in Shyama Charan Shukla's case [1974 (4) TMI 90 - MADHYA PRADESH HIGH COURT] which decision was affirmed by the Apex Court in Shyama Charan Shukla's case [1990 (9) TMI 296 - SUPREME COURT OF INDIA], it would be appropriate that the matter is remitted to the Assessing Officer to decide the issue afresh in accordance with law. The matter is remanded back to the assessing authority to decide the same afresh, in accordance with law. Issues:- Appeal under Section 63 of the PVAT Act dismissed for non-maintainability- Justification of penalty imposed against provisions of the repealed Act of 1948- Interpretation of Section 11(6) of the PGST Act- Validity of Division Bench judgment in Battulal's caseAnalysis:The judgment by the High Court of Punjab and Haryana pertains to two appeals, VATAP Nos. 299 and 300, with identical facts and issues. The appellant, an independent entity under Himachal Pradesh Tourism Development Corporation Ltd., filed VATAP-299-2018 against an order passed by the Value Added Tax Tribunal. The key issues raised include the maintainability of the appeal under Section 63 of the PVAT Act and the imposition of a penalty against the provisions of the repealed Act of 1948. The appellant applied for registration but later requested withdrawal without action. Subsequently, assessments were framed for a specific period, leading to the imposition of a penalty under Section 11(6) of the PGST Act.During the proceedings, the appellant argued that the penalty was unjustified, citing a Division Bench judgment of the Madhya Pradesh High Court in Battulal's case, which was later overruled by a Full Bench decision and affirmed by the Apex Court. The High Court acknowledged the discrepancy in the application of Section 11(5) of the Central Provinces and Berar Sales Tax Act in the assessment order. Given the legal developments in the interpretation of the relevant provisions, the Court decided to remit the matter back to the Assessing Officer for fresh consideration in accordance with the law.In conclusion, the High Court allowed the appeals, setting aside the orders passed by the assessing authority, DETC(A), and the Tribunal. The matter was remanded to the assessing authority for a fresh decision, emphasizing the need for compliance with the legal framework and recent judicial interpretations. The judgment focused on ensuring procedural fairness and adherence to the correct legal standards in the imposition of penalties under the tax laws.