Strict construction of penal tax provisions barred penalty where no prescribed audit-report form or particulars existed.

Penalty for failure to furnish an audit report could not be imposed where the Rules prescribed no form or particulars for that report. The Court held that the statutory obligation under the VAT Act depended on a delegated prescription, and without a prescribed form the precondition for treating the dealer as non-compliant was not met. Because the penalty provision was penal in nature, it had to be strictly construed, and the missing prescription could not be filled by implication through the Chartered Accountants Act form. The challenge therefore succeeded and the penalty was set aside.

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Issues: Whether penalty under Section 53(3) of the Tripura Value Added Tax Act, 2004 could be imposed when no form or particulars for the audit report were prescribed under the Rules.

Analysis: Section 53(1) required a dealer to obtain an audit report in the prescribed form and setting forth such particulars as may be prescribed, while Section 2(19) defined "prescribed" as prescribed by the Rules. The absence of any prescribed form or particulars in the Rules meant that the statutory precondition for treating the dealer as having failed to furnish the audit report was not satisfied. Since Section 53(3) is penal in nature, it had to be strictly construed, and the absence of delegated prescription could not be cured by adopting the form under the Chartered Accountants Act by implication.

Conclusion: The penalty could not be imposed and the challenge succeeded.

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