2011 (3) TMI 1546

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.... section 77(8) of the Act amounting to Rs. 32,900 on the petitioner-assessee. Section 77(8) of the RST Act, 1994 permits the assessing authority to impose penalty equal to the amount of five times of the tax leviable on such goods which are found to be unaccounted for in the books of accounts maintained by the assessee, after giving an opportunity to the assessee and after holding such further inquiry as it may consider necessary. The learned assessing authority by the impugned order passed on the same date of survey, i.e., November 22, 1997, imposed the said penalty for the alleged sale of 160 bags of "urad dal" for Rs. 1,64,505.60 on the ground that in the stock register maintained by the assessee, this quantity of "urad" was not av....

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.... sheet by the assessing authority while observing that the order sheet on which the impugned order was passed was of two pages, while the first page contained the signature of the assessee to the extent of his presence and survey by the assessing authority, the second page of the order sheet does not bear any such signature of the assessee, wherein, the impugned order has been passed, whereas, a proper adjudication order ought to have been passed after giving a reasonable opportunity of hearing to the assessee. The learned assessing authority also failed to give opportunity of hearing to the assessee and has not held further inquiry as was envisaged under section 77(8) of the Act and nothing about the production of bill of another registere....

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....ection 77(8) of the Act. The purpose of penalty under section 77(8) of the Act is not to extract five times of the imposable rate of tax as revenue but only if after proper and reasonable inquiry, and intentional non-recording of the goods in the books of accounts is found by the assessing authority, such a penalty can be imposed. It is incumbent on the part of the assessing authority to comply with the principles of natural justice, to hold reasonable and proper inquiry and consider the explanation of the assessee for the alleged non-recording of the entries in the regular books of accounts and stock register. In view of the fact that goods in question were purchased from the registered dealer and sold on the same date, without holding ....