TaxTMI 
TaxTMI 
2011 (12) TMI 488
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....ommissioner, Commercial Tax) and W.P.No. 3785 of 2004 (Ghanshyam Das through LRS v. Divisional Deputy Commissioner, Commercial Tax), involving similar legal issues based on similar set of facts. For the convenience, facts are taken from W.P.No. 3798 of 2004. Petitioner No. 1, M/s. Shri Ram Traders, is a registered firm, registered under the provisions of the Commercial Tax Act and co-petitioner Suresh Rai is the partner of the firm. The petitioners have assailed order, annexure P2, dated July 19, 2003 passed by the Commercial Tax Department, Narsinghpur by which a penalty of Rs. 2,10,000 was imposed upon the petitioners under section 69(2) of the M. P. Commercial Tax Act, 1994 (hereinafter referred as, "the Act") and order, annexure P6, ....
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....rder, annexure P4, has attained finality. As there was evasion of tax, a notice under section 69 of the Act was issued to the petitioners for extending the petitioner an opportunity to explain why penalty be not imposed. The assessee had not cared to give response to the notice, so an ex parte penalty order, annexure P2, was passed by which a penalty of Rs. 2,10,000 was imposed on the petitioners. Against this order the petitioners had preferred a revision which was partly allowed vide order, annexure P6, dated August 17, 2004 (supra). These orders are challenged in this petition. The learned counsel appearing for the petitioners submitted that before imposition of penalty the officer ought to have recorded independent findings tha....
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..... It was further submitted that it is a case in which tax was evaded so the petitioners were rightly imposed penalty by the assessing officer. To appreciate the rival contentions of the parties, it would be appropriate if relevant provision is quoted. Section 69(2) of the Act reads thus: "69(2). The proceeding under sub-section (1) shall be initiated by the Commissioner or the appellate or revisional authority as the case may be, by issue of a notice in the prescribed form for giving the dealer an opportunity of being heard. On hearing the dealer, the Commissioner or the appellate or the revisional authority as the case may be, shall pass an order not later than one calendar year from the date of initiation of such proceeding or withi....
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....ld be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. The apex court in Anantharam [1980] 123 ITR 457 (SC); [1980] Supp SCC 13, considering the question held that in the penalty proceedings the taxing authority is bound to consider the matter afresh on the material before it and the burden to prove rest on the Revenue. No doubt the fact that the assessment order contains a finding that the disputed amount represents income constitute good evidence in the penalty proceedings but the finding in the assessment proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding. The apex cou....
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....y for failure to carry out a statutory obligation is the result of quasi-criminal proceedings and penalty will not ordinarily be imposed unless the party obliged has either acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct, or acted in conscious disregard of its obligation. A penalty will not also be imposed merely because it is lawful to do so. Inspite of a minimum penalty prescribed, the authority competent to impose the penalty may refuse to impose the penalty if the breach complained of was a technical or venial breach, flew from a bona fide though mistaken belief. See Karnataka Rare Earth v. Senior Geologist, Department of Mines & Geology [2004] 2 SCC 783 and Bharjatiya Steel Industries v. Commiss....