Court sets aside penalty order, emphasizes willful suppression requirement, remits matter for fresh decision

The High Court allowed the writ petition, setting aside the penalty order and remitting the matter to the Assessing Officer for reconsideration. The Court emphasized the necessity of establishing willful and deliberate suppression for penalty imposition, which was lacking in this case. The Assessing Officer was directed to provide a hearing to the petitioner within six weeks for a fresh decision on the penalty issue. No costs were awarded, and related petitions were closed.

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Issues:
Challenge to assessment order for the year 2015-2016; Imposition of penalty without clear justification; Remittance of tax liability during inspection; Lack of willful and deliberate suppression findings.

Analysis:

1. Challenge to Assessment Order: The petitioner, a registered dealer in works contract, challenged the assessment order dated 31.03.2017 for the assessment year 2015-2016. The original assessment was completed through self-assessment under Section 22(2) of the Tamil Nadu Value Added Tax Act, 2006, accepting the turnover reported by the petitioner. Subsequently, an inspection by Enforcement Wing authorities revealed unaccounted sale invoices, leading to a pre-revision notice and imposition of penalty amounting to Rs. 1,22,317/-. The petitioner contended that since the tax amount was paid during inspection, no further proceedings were expected.

2. Imposition of Penalty: The respondent contended that the petitioner admitted suppression during inspection and paid the tax liability, justifying the penalty imposition. However, the petitioner argued that the Assessing Officer failed to provide independent reasoning or findings justifying the penalty, particularly regarding the willful and deliberate nature of the suppression. The lack of such findings rendered the imposition of penalty unsustainable, as per the petitioner's counsel.

3. Judicial Analysis: The Court noted that while the petitioner accepted the tax liability and paid the amount during inspection, the Assessing Officer did not provide explicit reasoning on the willful or deliberate nature of the suppression. The Court emphasized that for imposing a penalty, it is essential for the Assessing Officer to establish that the suppression was willful and deliberate. As such findings were absent, the Court decided to remit the matter back to the Assessing Officer for reconsideration, instructing to provide a hearing to the petitioner and to pass orders within six weeks from the date of the order.

4. Conclusion: Consequently, the High Court allowed the writ petition, setting aside the impugned order related to the penalty and remitting the matter back to the Assessing Officer for a fresh consideration on the penalty issue. The Assessing Officer was directed to provide a due opportunity of hearing to the petitioner within six weeks from the date of receipt of the court's order. No costs were awarded, and connected miscellaneous petitions were closed as a result of the judgment.

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