TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 309
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....legal in as far as it has not considered the question of jurisdiction of the revising authority for levying penalty under section 45(6) of the The GST Act for the first time in revision? (2) Whether Whether on facts and in the circumstances of the case the order of the Hon'ble Gujarat Value Added Tax Tribunal is proper and legal in as far as in applying the ratio of the judgment of Honourable Supreme Court in the case of M/s. Shree Balaji rice Mill 140 STC 267 and not following ratio of decision of Honourable Gujarat High Court in the case of M/s. Bhavnagar Chemical Works Ltd. 83 STC 409? (3) Whether on facts and in the circumstances of the case the order of the Hon'ble Gujarat Value Added Tax Tribunal is proper and legal in as far as it has not wrongly interpreted the provisions of subsections 5 and 6 of section 45 by adjusting the amount of interest against the tax paid and then arriving at the difference of twenty five per cent? (4) Whether on facts and in the circumstances of the case the order of the Hon'ble Gujarat Value Added Tax Tribunal is proper and legal in as far as it has not considered the question of imposition of penalty in light of absence of inte....
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....y difference between the tax assessed and tax paid is less than 25% and therefore, as per Section 45(5) r/w section 45(6), no penalty can be imposed." 2.3. That relying upon the decision of the Hon'ble Supreme Court in the case of Sree Balaji Rice Mill, Bellary vs. State of Karnataka reported in (2005) 4 SCC 21 ; 140 STC 267, by impugned judgment and order the learned Tribunal has dismissed the said appeal preferred by the appellantdealer and has confirmed the order of penalty imposed under Section 45(6) of the Act. That the learned Tribunal has also negatived the second alternative submission on behalf of the dealer that as the tax assessed and tax paid was less than 25% and therefore, as per Section 45(5) r/w Section 45(6) of the Act, no penalty can be imposed. For the aforesaid, learned Tribunal relying upon and considering Section 47(4A) and 47(4B) of the Act held that if the amount paid towards interest is first deducted/ adjusted and thereafter tax liability is concerned, the difference between tax paid and tax payable is more than 25%. Consequently, by impugned judgment and order, the learned Tribunal has dismissed the appeal preferred by the dealer. 2.4. Feeling aggrieved....
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....ivision Bench of this Court in the case of Bhavnagar Chemical Works Ltd (supra) was as such referred to by the Hon'ble Supreme Court while deciding the case of Sree Balaji Rice Mill, Bellary (supra). It is submitted that even in the case of Sree Balaji Rice Mill, Bellary (supra), the Hon'ble Supreme Court did consider the distinguishing features in / under other Sales Tax Act and under the Karnataka Sales Tax Act and only thereafter the Hon'ble Supreme Court has confirmed the penalty imposed by the Revisional Authority, by observing that considering the provisions of the Karnataka Sales Tax Act, entire assessment proceedings were at large before the Revisional Authority. It is submitted that the aforesaid has not been properly appreciated by the learned Tribunal and the learned Tribunal has materially erred in relying upon and / or applying the law law laid down by the Hon'ble Supreme Court in the case of Sree Balaji Rice Mill, Bellary (supra). 3.2.4. It is vehemently submitted by Shri Tushar Hemani, learned advocate for the assessee that as such the decision of the Division Bench of this Court in the case of Bhavnagar Chemical Works Ltd (supra) holds the field which deals with th....
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.... be imposed unless difference between tax payable and tax paid with the return is more than 25%. It is submitted that in the present case the tax assessed as per the assessment order is Rs. 53,16,858/- and the tax paid by the appellant as per the assessment order is Rs. 43,89,416/- and therefore, difference comes to Rs. 9,27, 442/- . It is submitted that now the difference of 25% of the tax paid comes to Rs. 10,97,354/- . It is submitted that therefore, in the present case difference of tax paid and tax assessed would be less than 25% and therefore, the AO rightly not imposed penalty under Section 45(6) of the Act. It is further submitted that further on revision of the order of assessment the tax dues is enhanced to Rs. 54,83,267/- while the tax paid is Rs. 43,89,416/- . It is submitted that therefore, the difference comes to Rs. 10,93,851/- it would be again less than 25% and therefore, also the penalty under Section 45(6) was not leviable. It is submitted that learned Tribunal is not justified in first deducting / adjusting amount of interest of Rs. 28,234/from the tax paid by the dealer and then arrive at a difference of tax and tax assessed as more than 25% and therefore, the ....
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....ri Vora, learned AGP that under the Gujarat Sales Tax Act levy of tax and penalty is assessed in the single order of the assessment. It is submitted that so non levy of penalty, which is otherwise leviable in the assessment order would entitle authorities to invoke powers under Section 67 of the Act. In support of his above submission, he has heavily relied upon the decision of the Hon'ble Supreme Court in the case of Sree Balaji Rice Mill, Bellary (supra), 4.4. Now, so far as the attempt on the part of the appellant to draw distinction between Kanataka and Gujarat Act namely record of proceeding visavis record of order, it is submitted by Shri Vora, learned AGP that in taxation, record of proceedings and record of order would always remain same. It is submitted that there cannot be any separate record or proceedings. It is submitted that therefore, distinction sought to be made by the appellant on the basis of the aforesaid two proposition is clearly against the fundamental principles and practice of tax laws. It is submitted that before First / Revisional Authority the entire record of proceedings will be available. It is submitted that there is nothing like separate 'record of ....
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....pplied towards interest, thereafter for penalty and thereafter for tax as contended on behalf of the Revenue ? 6.0. While considering the first question few facts which emerge from the record are required to be considered. That by order dated 31.3.2005 under Section 41(3) of the Gujarat Sales Tax Act for AY 2000-01, the Assessing Authority raised the additional demand of tax of Rs. 14,95,390/- . Feeling aggrieved and dissatisfied with the assessment order passed by the AO raising additional demand of tax of Rs. 14,95,390/- , the appellant hereinassessee - dealer preferred the appeal before the First Appellate Authority. At this stage, it is required to be noted that the First Appellate Authority and the Revisional Authority is the same authority. That in the appeal, the First Appellate Authority found that the AO has materially erred in levying purchase tax at 19.75% only, against the levy of purchase tax on lignite at 25%. The First Appellate Authority / Revisional Authority also found that though the penalty was leviable under Section 45(6) of the Act, the AO did not levy / impose the penalty under Section 45(6) of the Act and therefore, the First Appellate Authority in exercise....
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....cumstances of the case, the questions which are posed for the consideration before this Court are required to be considered. 6.1. While considering the aforesaid questions, relevant provisions of the Gujarat Sales Tax, more particularly, Sections 45, 47, 47(4A) and 47(4B) and Section 67 of the Act are required to be referred to, which are as under: SECTION 45 : Imposition of penalty in certain cases and bar to prosecution (1) Where any dealer or Commission agent becomes liable to pay purchase tax under the provisions of subsection (1) or (2) of section 16 , then, the Commissioner may impose on him, in addition to any tax payable,- (a) if he has included the purchase price of the goods in his turnover of purchase as required by subsection by subsection (1) of section 16 , a sum by way of penalty not exceeding half the amount of tax, and (b) if he has not so included the purchase price as aforesaid, a sum by way of penalty not exceeding twice the amount of tax. (2) [xxx] if it appears to the Commissioner that such dealer. (a) has failed to apply for registration as required by section 29 , or (b) has without reasonable cause, failed to comply with the notice under secti....
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....m not exceeding two thousand rupees. (8) If any dealer contravenes the provisions of Section 57 , the Commissioner may direct him to pay by way of penalty a sum not exceeding ten percent of the amount of the bill or cash memorandum in respect of which such contravention has been made. (9) If the Commissioner has reason to believe that any person is liable to a penalty under any of the provisions of this section, he shall serve on him a notice requiring him on a date and at a place specified in the notice to attend and to show cause why a penalty as provided in such provision should not be imposed on him. (10) The Commissioner shall thereupon hold an inquiry and shall make such order as he thinks fit. (11) This section as amended by section 4 of Gujarat Sales tax (Amendment) Ordinance, 1991 shall apply and shall be deemed always to have applied in relation to the liability to pay tax on sale of goods, specified sales and purchases of goods, which have taken place during the period commencing on the 1st April, 1990 and ending immediately before the commencement of the said amending section. SECTION 47 : Payment of tax and deferred payment of tax etc 1) Tax shall be paid i....
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....trial Investment Corporation Limited or the Gujarat State Financial Corporation limited, then such tax shall be deemed, in the public interest, to have been paid.] -[(4AA) Where provisional assessment is made in respect of any period under subsection( 1) of section 41B and thereafter assessment is made in respect of that period or part of that period under section 41 , the amount of tax provisionally assessed and paid by a dealer shall be adjusted against the amount of tax assessed and payable by a dealer.] -[(4A) (a) Where a dealer does not pay the amount of tax within the time prescribed for its payment under subsection (1), (2)or (3), then there shall be paid by such dealer for the period commencing on the date of expiry of the .aforesaid prescribed time and ending on date of payment of the amount of tax, simple interest, at the rate of 158 [eighteen per cent], per annum on the amount of tax not so paid or on any less amount thereof remaining unpaid during such period. (b) Where the amount of tax assessed or reassessed for any period, under section 41 or section 44 , subject to revision if any under section 67 , exceeds the amount of tax already paid by a dealer for that p....
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....] [4B] Where a dealer is liable to pay interest under subsection (4A) and he makes payment of an amount which is less than the aggregate of the amount of tax, penalty and interest, the amount so paid shall be first applied towards the amount of interest, thereafter the balance, if any, towards the amount of penalty and thereafter the balance, if any, towards the amount of tax. (5) [Any tax, penalty or interest] which remains unpaid after the date specified in the notice for payment, or after the extended date of payment, and any installment not duly paid, shall be recoverable as an arrear of land revenue. 1[(6) This sections as amended by section 5 of the Gujarat Sales Tax (Amendment) Ordinance, 1991 shall apply and shall be deemed always to have applied in relation to the liability to pay tax on sales of goods, specified sales and purchases of goods which have taken place during the period commencing the 1st April, 1990 and ending immediately before the commencement of the said section.] 67. REVISION : (1) subject to the provisions, of section 66 and to any rules which may made in this behalf, : (a) the Commissioner on his own motion within three years 1[or on applicat....
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....ssed as aforesaid and the amount paid. Subsection (6) of Section 45 provides that where under subsection (5), a dealer is deemed to have failed to pay the tax to the extent mentioned in the said subsection, there shall be levied on such dealer a penalty not exceeding one and onehalf times the difference referred to in subsection (5.). Thus, on bare reading of subsection (5) and (6) of Section 45, it is integral part of the assessment and the levy of penalty on the difference of amount of tax paid and amount of tax payable as per the order of assessment or reassessment as the case may be shall be automatic. Therefore, when the penalty on the difference of amount tax paid and tax payable is more than 25% of the amount of tax so paid, there shall be automatic levy of penalty under Section 45(6) of the Act and therefore, no separate notice is required to show cause as to why penalty under subsection (6) of Section 45 may not be imposed. However, a notice may require to be issued while imposing penalty in other cases, more particularly, Section 45(1)(b). In the case of Oil and Natural Gas Corporation Ltd(supra), it is specifically observed and held by the Division Bench of this Court th....
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....uthority and therefore, also the penalty under Section 45(6) of the Act was leviable / imposable on the difference of tax paid at the time of filing of return and tax payable as determined by the Appellate Authority. Under the circumstances also, penalty imposed under Section 45(6) of the Act is not required to be interfered with. 7.0. Now, so far as submission of Shri Tushar Hemani, learned advocate for the appellant that on the decision of the Hon'ble Supreme Court in the case of Sree Balaji Rice Mill, Bellary (supra) that the wording in the Karnataka Sales Tax Act are different as that of Section 67 of the Gujarat Sales Tax Act and in the Karnataka Sales Tax Act entire record of the assessment proceedings shall be before the Revisional Authority and so far as under Gujarat Sales Tax Act, before the Revisional Authority and as per Section 67 of the Act only the record of the order (assessment order) shall be before the Revisional Authority and therefore, the Revisional Authority is required to consider the legality and validity of the assessment order only and cannot impose the penalty for the first time, when the AO did not impose the penalty while passing the assessment order ....
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....mount of tax paid and the tax payable, the Assessing Authority shall impose the penalty. Under the circumstances, the decision of the Division Bench of this Court in the case of Bhavnagar Chemical Works Ltd (supra) shall not be applicable to the facts of the case on hand, more particularly, with respect to the penalty imposed under Section 45(6) of the Act. As rightly observed by the Division Bench of this Court when AO did not imposed the penalty under Section 45(1)(b) of the Act and no notice was issued by the AO calling upon the assessee to show cause as to why the penalty under Section 45(1)(b) of the Act may not be imposed, the Division Bench rightly observed that the same may not be imposed / levied by the Revisional Authority for the first time. However, the same shall not be applicable with respect to the penalty under Section 45(6) of the Act. 9.0. In view of the aforesaid facts and circumstances of the case, we are of the opinion that the learned Tribunal has not committed any error in confirming the order passed by the Revisional Authority in imposing the penalty under Section 45(6) of the Act on the difference of amount of tax paid with the return and the amount of tax....