2023 (5) TMI 234 - HC - VAT and Sales Tax

Court quashes TVAT penalty, stresses procedural fairness. Petitioner granted liberty for penalty reconsideration.

M/s. Gemini Distilleries (Tripura) Pvt. Ltd. Versus The State of Tripura, The Superintendent of Taxes, Government of Tripura,

The court quashed the penalty of Rs. 2,73,800.30 imposed on the petitioner under Section 53 of the TVAT Act, 2004, for the assessment year 2016-17 due to ... Levy of penalty u/s 53 of the TVAT Act, 2004 - it is the contention of the petitioner that in the absence of a prescribed format as per Section 53(1) of the Act, 2004, the petitioner could not be made liable for penalty on failure to submit the audited report within the prescribed time - absence of notice before imposition of penalty - violation of principles of natural justice - HELD THAT:- The penalty imposed upon the petitioner for violation of Section 53(1) of the TVAT Act, 2004 suffers from lack of proper notice and absence of reasonable opportunity of being heard, as is required under Section 53(3) of the Act, 2004. A perusal of the assessment order clearly shows that the proceedings were initiated under Section 31(1) of the TVAT Act, 2004, but no separate notice was issued under section 53(1) of the Act, 2004 before imposition of penalty. Without going into the other issue of absence of prescribed format for submission of audited return in terms of Section 53(1) of the Act, 2004, the impugned penalty imposed upon the petitioner amounting to Rs. 2,73,800.30 vide order dated 30.03.2022 (Annexure 3 to the writ petition) is quashed. However, it is made clear that except the penalty part, the rest of the assessment order remains intact - Petition allowed. Issues involved:The issues involved in the judgment are the penalty imposed under Section 53 of the TVAT Act, 2004, and the absence of prescribed format for filing audited returns.Penalty Imposed under Section 53 of the TVAT Act, 2004:The writ petitioner challenged the penalty imposed under Section 53 of the TVAT Act, 2004, for the assessment year 2016-17. The petitioner contended that the absence of a prescribed format as per Section 53(1) of the Act prevented them from being liable for the penalty for failure to submit the audited report within the prescribed time. The petitioner also argued that there was no notice issued before the imposition of the penalty, which goes against the provisions of Section 53(3) of the Act and violates principles of natural justice. The court found that the penalty lacked proper notice and reasonable opportunity for the petitioner to be heard, as required by law. Therefore, the penalty of Rs. 2,73,800.30 imposed on the petitioner was quashed, while the rest of the assessment order remained intact. The respondent was granted liberty to reconsider the imposition of penalty after providing proper notice and opportunity for the petitioner to be heard.Absence of Prescribed Format for Audited Returns:The petitioner argued that there was no prescribed format for filing the audited returns as required by Section 53(1) of the Act at the time of the assessment. The petitioner highlighted that the Assessing Officer acknowledged the timely filing of returns but penalized for a slight delay in one instance. The court did not delve into this issue extensively as the penalty was quashed on grounds of lack of proper notice and opportunity to be heard. The court directed the respondent to reevaluate the penalty decision after following due process.This judgment emphasizes the importance of following procedural requirements, providing notice, and ensuring the opportunity to be heard before imposing penalties under the TVAT Act, 2004.