TaxTMI 
TaxTMI 
TaxTMI 
2017 (6) TMI 563
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....were framed: "(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that penalty could be imposed in the case of the appellant under section 34(7) of the VAT Act as well as under section 34(12) of the VAT Act? (2) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in confirming the order of penalty under section 34(7) and 34(12) of the VAT Act in the case of the appellant without there being any mala fide intent of the appellant? (3) Whether on the facts and in the circumstances of the case, the order of the Appellate Tribunal confirming the order of the authority below of imposition of penalty of the appellant is perverse and bad in l....
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....th the government. To support such a contention, the assessee relied on various circumstances including a letter written by the assessee to the Commissioner of Sales Tax on 22.05.2006 requesting him to clarify the assessee's tax liability under the circumstances to which the assessee had received no reply. The assessee also pointed out that the tax was paid immediately on demand with interest without murmur. The assessee contended that the Value Added Tax Act was brought into effect shortly before the period of tax default, certain amendments were made in the relevant taxing provisions. Even the consultants were not clear about the tax liability under such circumstances and that the other dealers in the State were not paying taxes. The asse....
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....involved. At the outset, learned advocate for the appellant did not press question no. 1 and the same is therefore disposed of without answering it. He, however, argued at length on questions no. 2 and 3. Taking us through the documents on record and in particular the judgement of the Tribunal under challenge, he submitted that there were strong grounds suggesting that non payment of tax was a pure bona fide error on the part of the assessee. The entire issue was in a flux. Major amendments were made in the law only recently. Other dealers who were purchasing Isabgul and selling it from within the State after processing, admittedly did not have any tax liability. The assessee bona fide believing himself at par with such dealers did not pay ....
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....resold with the State then such dealer or the commission agent shall be liable to pay purchase tax on the turn over of such purchases at the prescribed rate. In other words, while purchasing goods from an agent who has availed of the facility of composition of tax, the purchasing dealer would not pay tax on sale of such product as long as the product is not sold within the State. Accordingly, if the assessee had sold the goods within the State or exported from the State, in either case there would have been no tax liability. 6. On 22.05.2006, the assessee had written to the Commissioner of Sales Tax pointing out that the Isabgul purchased by the assessee are sent to Abu Road for processing. The by-product such as Psyllium husk and cattle f....
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....e the assessee were purchasing the goods from local market and exporting after processing within the State, would therefore have no tax liability. Only difference between their cases and that of the assessee was that the assessee had a processing unit at Abu Road which was situated outside the State and instead of bringing the goods physically back to the State before exporting, the assessee by raising invoices from the registered office at Ahmedabad directly transported the goods from Abu Road for export. Had these goods been physically brought back within the State and then shown to have been sold even the department would not have raised any tax demand. Thus the statutory provisions for themselves were completely new and possible of coun....
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....r actuated by the facts and circumstances noted above. Even the Tribunal did not discard the assessee's contention about the recent amendments about possible confusion and the fact that the authority making provisional assessment also did not raise a tax demand. Despite these observations, the Tribunal sustained a portion of the penalty imposed by the Assistant Commissioner which in our opinion was passed on certain presumptions not supported by materials on record. For example, the Tribunal observed that since the assessee was having its processing unit at Abu Road and was exporting the goods from Abu Road, it may not be able to keep the sale prices at a competitive level with other dealers and therefore it might have stopped paying the ta....