2015 (3) TMI 301

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....ection 59(2) of the DVAT Act, 2004 (hereafter referred to as "the Act"), penalty action under Section 86(14) for non-compliance with Sections 59(1), (2) and (3) could not have been initiated and taken. 2. We have considered the submissions on behalf of the Revenue and further considered the record. The DVAT Tribunal set aside the order of the Objection Hearing Authority (OHA) and the Value Added Tax Officer (VATO) on the ground that sufficient opportunity had not been provided in the facts of the case to justify imposition of a mandatory penalty of Rs. 50,000/- under Section 86(14) of the Act. However, the DVAT Tribunal also stated in the impugned order in para 9 that since rules under Section 59(2) had not been yet been framed, penalty ....

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....w that after rectification orders, penalty order does not survive. In fact, Section 59(2) speaks of requirement of the Commissioner for the proper administration of the provisions of the DVAT Act towards dealer to produce such record or to prepare and provide any documents of which requirement's violation invite penalty u/s 86(14) of Rs. 50,000/-. The word 'penalty' itself connotes a punitive action by passing an order to the extent of Rs. 50,000/- u/s 86(14) of the DVAT Act, 2004. The penal orders contemplate violation of the provisions of Section 59(2) with relation to the administration of the provisions of the DVAT Act, 2004. The administration of the DVAT Act is well defined in the preamble of the Act read with the provisions of the Ac....

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...., which has not resulted in assessment of tax by the Assessing Authority. However, in the present case as already observed after rectification order, reducing to tax liability to NIL by the VATO himself, there exists no tax effect of non-compliance of notice u/s 59(2) and 59(3) of the DVAT Act, 2004." 3. Section 59 reads as follows: "59. Inspection of records Rule: Nil Form: Nil (1) All records, books of accounts, registers and other documents, maintained by a dealer, transporter or operator of a warehouse shall, at all reasonable times, be open to inspection by the Commissioner. (2) The Commissioner may, for the proper administration of this Act and subject to such conditions as may be prescribed, require - (a) any dealer....