TaxTMI 
TaxTMI 
2015 (11) TMI 881
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....of four per cent. on branded confectionery, which according to Revenue was taxable at 12.5 per cent. Notice to show cause resulted. Reply was filed by the assessee, but found unsatisfactory. The assessing officer vide order dated February 28, 2011 held the assessee liable to pay differential tax of 8.5 per cent. over the tax of four per cent. already paid and also held it liable to pay interest under section 55 of the 2003 Act. Penalty under section 61 of the 2003 Act was also levied. The assessee appealed under section 82 of the 2003 Act against the order dated February 28, 2011 before the Deputy Commissioner (Appeals). The Deputy Commissioner (Appeals) vide order dated February 22, 2012 while upholding levy of additional tax and interest, set aside the order of penalty under section 61 of the 2003 Act. Dissatisfied with the order dated February 22, 2012, both the Department and the assessee preferred further appeals under section 83 of the 2003 Act to the Board. The Board vide order dated September 19, 2013 has dismissed departmental appeal relying upon the judgment of the honourable Supreme Court in case of Sree Krishna Electricals v. State of Tamil Nadu [2009] 23 VST 249 (SC); ....
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....x due being found. Section 61(1) of the 2003 Act delineates the situations in which avoidance/evasion of tax through acts of concealing and misleading or "in any other manner" (underlining1 mine) can be visited with penalty. It reads as under: "61. Penalty for avoidance or evasion of tax.-(1) where any dealer has concealed any particulars from any return furnished by him or has deliberately furnished inaccurate particulars therein or has concealed any transactions of sale or purchase from his accounts, registers or documents required to be maintained by him under this Act or has avoided or evaded tax in any other manner, the assessing authority or any officer not below the rank of an Assistant Commercial Taxes Officer as may be authorised by the Commissioner, may direct that such dealer shall pay by way of penalty, in addition to the tax payable by him under this Act, a sum equal to two times of the amount of tax avoided or evaded." The Department apparently drops its anchor in the general words in the later part of section 61 in so far as they provide that "or has avoided or evaded tax in any other manner". Advocating a literal interpretation of the aforesaid words,....
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....essee is held to have deliberately sought to defraud the revenue by its fraudulent act/conduct. This would include a reckless, mala fide and mischievous classification of goods for a rate of tax which no reasonable man could conceivably assert. The words "any other manner" in the later part of section 61 of the 2003 Act would therefore mandate specific finding of deliberate wrong doing attributable to the assessee to defraud the Department and without that the assessee could not be made liable to penalty under section 61 of the 2003 Act. The sequitur is that where the liability of tax or additional liability of tax is visited upon an assessee on the basis of a bona fide dispute as to liability/classification being decided in favour of sales tax authorities and against the assessee, without any deliberate fraudulent act/reckless and mala fide claims as to classification being attributed to the assessee, it would not be liable to penalty under section 61 of the 2003 Act. Further a reading of section 61 of the 2003 Act indicates that penalty is conditional upon the circumstances detailed in section 61 of the 2003 Act being found and is discretionary in nature. For this conclusion, ....
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....ct. The wording of section 78(5) of the Act of 1994 and the nature of penalty thereunder is wholly distinct and different from the wording and nature of section 61 of the 2003 Act. As stated hereinabove, penalty under section 61 of the 2003 Act is discretionary and contingent upon fulfilment of the pre-conditions detailed in the provision. No such discretion has been conferred on the assessing authority under section 78(5) of the Act of 1994, in cases where empty or incomplete disclosure forms required to accompany the goods in transit were held by the honourable Supreme Court to entail a presumption of mens-rea to evade tax. Reference to the judgment in case of R. S. Joshi, Sales Tax Officer, Gujarat v. Ajit Mills Limited [1977] 40 STC 497 (SC); AIR 1977 SC 2279] and the principle enunciated therein on the facts of that case before the honourable apex court are inapposite to the facts in issue and legal question in the present revision petition. The honourable Supreme Court in the case of Bharjatiya Steel Industries [2008] 13 VST 514 (SC); [2008] 11 SCC 617, has held that it could not be argued that in no circumstance absence of mens-rea could be brought as a defence against le....
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....that where a mistake in the non-payment/short-payment of tax was bona fide and there was no apparent intention to evade tax by the assessee imposition of penalty under section 11AC would not be justified. Reverting to the facts of the present case, the Tax Board has held that during the period relevant to assessment of tax as against the assesse under the 2003 Act, it was an admitted fact that all sale transactions conducted by the assessee in the year relevant to levy of tax in the State of Rajasthan were indicated in its books of accounts and also duly invoiced. There was no attempt to defraud the revenue by any concealment or misinformation. No finding of reckless/mala fide classification sought with regard to the goods sold has been arrived at. The dispute between the assessee and the Revenue was bona fide and related merely to the issue of classification and consequent rate of tax under the 2003 Act leviable on the sale of goods by the assessee, i.e., "Priyagold TM Toffito Mango Cream Toffee". The dispute was therefore a bona fide one as to the interpretation/ classification of the products sold by the assessee for the purpose of levy of tax. Such a dispute did not supply a....