2013 (3) TMI 255

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....ealed his turnover or aggregate of his purchase prices or to have furnished false particulars of his sales or purchases in his return or returns or to have furnished a false return or returns for the purpose of sub-section (1) unless he proves to the satisfaction of the Commissioner or the appellate or the revisional authority, as the case may be, that the concealment of the said turnover or the aggregate of purchase prices or furnishing of particulars of sales or purchases or furnishing of the false return or returns was not due to any fraud or gross negligence on his part." 2. According to the petitioner, once the return has been filed correctly and the tax has also been calculated in the return correctly, mere non-payment of the tax alongwith return would not attract the penalty under section 69(3) of the Act. It is submitted that in such circumstances, at the most provision of section 26 of the Act may be attracted which reads as under:- 26 : Returns- [(1) (i) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner; and (ii) Every registered dealer; and (iii) Every dealer whose registration certificate has been can....

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....d inter alia explained during the proceedings of assessment that they were under bona fide impression and belief that entry tax is payable during the relevant time only upon the realisation of sale proceeds of the goods brought into the State of M.P. However, the assessee had maintained necessary books of account depicting the entry and receipt of various goods and the extract of entry of goods effected into the State of M.P., was produced during the assessment process and the same was accepted without any demur. 3. It is therefore clear from the fact that the Assessee did not conceal any transactions in their books of account during the relevant period especially in the light of the fact that the figures relating to entry of various goods as extracted from the books of account was accepted for the purpose of assessment. Thus, the bona fides of the assessee are proved and established beyond the doubt that the books of account reflect true position and it is the figure that was extracted from the books of account is adopted and considered by the assessing authority for the purpose of assessment." 5. However, the Assessing Officer did not agree with the contentions of the petit....

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....f sales or purchases or filing of false returns. Nonpayment or short payment of tax is not punishable u/s 69. II. That sub section (3) of section 69 which shifts the burden of proof upon the dealer if total shown as payable according to the return or returns and paid by the dealer for any period or part thereof is less than 80% of the total tax assessed is only a rule of evidence and creates a rebuttable presumption about deemed concealment by the dealer. However, the presumption can be rebutted by dealer by showing that the concealment or furnishing of particulars of sales etc or furnishing of the false returns etc was not due to any fraud or gross negligence on his part. III. That thus even in rebuttal the dealer is required to prove that the concealment or furnishing of inaccurate particulars or filing of false returns was not due to any fraud or gross negligence. IV. That the amount of penalty calculated under sub section (2) is also relatable to the amount of tax evaded. Hence if there is no concealment of turnover or furnishing of inaccurate particulars of sales or purchases or there is no filing of false returns, no proceedings u/s 69 can be initiated. V. That so....

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....T Act, it was held as under:- "A return cannot be said to be false within the meaning of section 43 unless there is an element of deliberateness in it. It is possible that even where the incorrectness of the return is claimed to be due to want of care on the part of the assessee and there is no reasonable explanation forthcoming from the assessee for such want of care the Court may in a given case infer deliberateness and the return may be liable to be branded as a false return. But where the assessee does not include a particular item in the taxable turnover under a bonafide belief that he is not liable so to include it, it would not be right to condemn the return as a false return inviting imposition of penalty." 12. In so far as the observations made in that case is concerned they have no application to the facts of this case inasmuch as in the present case, it is not a case that the return filed by the petitioner was a return filed in inadvertence or based upon wrong calculation. 13. Another judgment relied upon by the petitioner is the decision of the Apex Court delivered in the case of Hindustan Steel Limited Vs. State of Orissa reported in 25 STC 211. In that case i....

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....calculated, a presumption would arise provided that the tax deposited is less than 80% of the amount due. In the present case, the aforesaid judgment is of no consequence for the simple reason that the penalty which can be levied has to be five times of the tax evaded, the question of discretion does not arise. 17. We have also gone through the other judgments cited on behalf of the petitioner. We are of the considered view that the judgments cited does not come to rescue the petitioner. Here it was not a case of concealment of the turnover or any mistake committed on behalf of the petitioner in calculating the tax. Here it was a case where the petitioner was fully aware of its liability yet decided not to deposit the tax which made it a defaulter within the definition of Section 69 of M.P.C.T.Act so as to call the return filed by him as false return. 18. Learned counsel for the petitioner is also relied upon the judgment of the Division Bench of this Court delivered in the case of IND Exports Limited Vs. Assistant Commissioner of Commercial Tax and others reported in (2011) 43 VST 450 (MP). In that case, Division Bench of this Court set aside the imposition of penalty imp....

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....he petitioner recovered and paid the tax at the rate of 2% but when the additional demand of Rs.10,48,301/- was raised, the same was been deposited. 13. It is now well settled that the order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. To make the assessee liable for penalty fallacy should be in the disclosure of the facts required to be stated in the return. When the facts are fully disclosed in a return and are not misstated, the raising of a legal plea of exemption cannot make the return a false return within the meaning of section 69 unless there is an element of deliberateness in it. Where the assessee does not include a particular item in the taxable turnover under a bonafide belief that he is not liable so to include it, it would not be right to condemn the return as a "false" return inviting imposition of penalty. The concealment of turnover and furnishing of a false return, to fall within the....

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....t was a case where there was a mistake in deposit of tax due for the aforesaid reasons and that it was not a case of negligence. 21. Now coming to the argument of the learned counsel for the petitioner that in the present case even if there was deficiency in payment of tax determined, then also the case would have attracted the penalty in accordance with provision contained under section 26 of the Act and not the one as provided for under section 69 of the Act. 22. However, on perusal of the provisions of Section 69 and 26 of the M.P.C.T.Act it is clear that in Section 69, the liability for imposition of penalty arises on account of less payment of tax that also below 80%, when it was known fully well that it was their liability to pay full tax, whereas in the case of Section 26, the liability to pay penalty at the time of filing of the return and payment of tax, at that time of filing of the return, when tax is paid simultaneously. Both these situations are different and deals with the different situation. However, even otherwise fiscal statutes are to be construed strictly and on their plain reading reference can be made to a judgment of Hon'ble Supreme Court delivered in t....

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