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of <h1>Penalty under Section 10(2) OET Act upheld; interest liability deleted, revision petition dismissed</h1> <h3>Shree Plastics Pvt. Ltd., Berhampur Versus State of Odisha represented through Commissioner of Sales Tax, Odisha</h3> Shree Plastics Pvt. Ltd., Berhampur Versus State of Odisha represented through Commissioner of Sales Tax, Odisha - (2023) 119 G S.T.R. 85 Issues:Assessment of penalty under Section 10 of the Orissa Entry Tax Act, 1999 based on the escapement of tax without reasonable cause.Analysis:The petitioner, a manufacturer of PVC suction and Garden pipes, was subjected to assessment proceedings under Section 10 of the OET Act due to allegations of non-payment of entry tax on goods purchased from outside the State. The petitioner argued that it withheld the tax payment based on a previous court judgment until an interim order by the Supreme Court prompted compliance. The assessing officer levied a penalty under Section 10 along with the tax amount. The Deputy Commissioner of Sales Tax (DCST) later deleted the penalty but imposed interest for withholding tax arbitrarily, which the petitioner paid in full.The State appealed against the DCST's decision, leading to the Tribunal's order confirming the tax and penalty while deleting the interest. The High Court was tasked with determining whether the penalty under Section 10 was rightfully imposed. The petitioner contended that there was no reasonable cause for the penalty since it acted based on a court judgment. However, the court noted that the previous judgment did not provide a valid basis for withholding tax, as it did not challenge the entry tax requirement and was not applicable to all parties. Therefore, the court upheld the penalty imposed by the assessing officer, finding no error in exercising discretion under Section 10 of the OET Act.The court ruled in favor of the Department, dismissing the revision petition and clarifying that the interest deleted by the Tribunal need not be paid by the petitioner. Any amount paid under interest would be adjusted against the penalty imposed by the Tribunal.
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