2015 (3) TMI 519

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...." 2. We have heard Mr. Dave, learned AGP for the appellant - revenue and Mr. Kazi, learned counsel appeared for the respondent upon advance copy. 3. The facts are that tax assessment of outstanding demand of Rs. 16,24,298/- including tax and the penalty was made by the Assessing Officer. In the appeal before the first appellate authority, ultimately, the appeal was dismissed. In the second appeal before the Tribunal, it was found by the Tribunal that the demand of tax and the interest deserve to be maintained, but the amount of penalty is removed. It is under these circumstances, the appeal before this Court. 4. In our view, the question is already covered by the earlier decision of this Court dated 19.1.2015 in Tax Appeal No.28 of....

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....14, wherein it was held that if there is no attempt to evade or avoid payment of tax, the interest or the penalty could not have been imposed. 6. We may record that this Court in the above referred Tax Appeal No.1284 of 2014 vide its decision dated 25.11.2014 had observed thus:- "1. State is in appeal against the judgment of the Gujarat Value Added Tax Tribunal ('the Tribunal' for short) proposing following questions for our consideration: "(1) Whether Tribunal erred in deleting levy of interest and penalty merely because assessee had excess input credit adjustable against tax demand? (2) Any other substantial question of law as may be deemed fit by the Hon'ble High Court may kindly be framed." 2. From the record, it emer....

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.... the circumstances, the basic intention of attempting to evade or avoid payment of taxes would be necessary for imposing penalty. 4. When the Tribunal found on facts that in view of availability of input tax credit as against the assessed additional tax, there was no intention on part of the assessee to avoid payment of taxes, no question of law arises. Tax appeal is dismissed. Civil Application also dismissed." 7. Same situation arises in the present matter inasmuch as the demand is confirmed and the adjustment is permitted but the interest and penalty imposed are deleted. 8. It is not in dispute that the Assessee had no surplus balance of input credit, which has been adjusted against the demand of tax upon reassessment. Under the....