TaxTMI 
TaxTMI 
2019 (12) TMI 539
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.... common Judgement. 3. The petitioner Company is engaged in the production, supply and sale of electricity, and for the purpose of production of the electricity at its Thermal Power Plant, it requires coal, which was purchased from the Central Coalfields Limited. As provided under Section 45(1) of the Jharkhand Value Added Tax Act, 2005, (hereinafter referred to as the 'J.V.A.T. Act'), the petitioner Company was required to deduct the prescribed amount, which is 2%, on account of VAT, as tax deducted at source (for short 'TDS'), from the bills raised by the Central Coalfields Limited for supply of coal, and by virtue of Section 45(3) of the J.V.A.T. Act, the same was required to be deposited in the Government Treasury in the prescribed manner. By virtue of Section 45(5) of the J.V.A.T. Act, if such TDS was not made, the Company was liable to pay by way of penalty a sum not exceeding twice the amount of the tax deductible under sub-Section (1). 4. In all these matters, this obligation of deduction of TDS was not carried out by the petitioner Company, and accordingly, the impugned demand have been raised by the Assessing Authority under the J.V.A.T. Act, imposing....
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.... obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or whether the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. ------------------." (Emphasis supplied). Learned senior counsel again placed reliance upon the decision of the Hon'ble Apex Court in Employees' State Insurance Corporation Vs. HMT Ltd. & Anr., reported in (2008) 3 SCC 35, wherein the law has been laid down as follows:- "21. A penal provision should be construed strictly. Only because a provision has been made for levy of penalty, the same by its....
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....for statutory offence. Therefore, there is no question of proving of intention or of mens rea as the same is excluded from the category of essential element for imposing penalty. Penalty under Section 78(5) is attracted as soon as there is contravention of statutory obligations. Intention of parties committing such violation is wholly irrelevant. (Emphasis supplied). Further reliance has been placed by the learned counsel for the State upon the decision of the Hon'ble Apex Court in Commissioner Of Customs (Import), Mumbai Vs. Dilip Kumar & Company & Ors., reported in (2018) 9 SCC 1, wherein the Hon'ble Apex Court has placed reliance with the approval, upon the decision of five Judges' Bench of the Hon'ble Apex Court in State of W.B. Vs. Kesoram Industries Ltd., reported in (2004) 10 SCC 201, laying down the law as follows:- "(i) In interpreting a taxing statute, equitable considerations are entirely out of place. A taxing statute cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute s....
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....ed either wholly or partly by the State Government or the Central Government shall, at the time of payment, subject to such conditions and restrictions as may be prescribed, deduct an amount at the rate as may be specified by the State Government by a notification on account of tax on the amount of such payment: Provided that the rate or rates to be specified by the State Government shall not be more than the rate of tax applicable to the goods sold or supplied. (2) Notwithstanding any law or contract to the contrary, the person making such deduction shall be lawfully competent to make such deduction. (3) Payment of the amount deducted under sub-section (1) into the Government Treasury in the prescribed manner, shall be the liability of the person making such deduction. (4) Payment of the amount deducted under sub-section (1) into the Government Treasury by the person making the deduction shall be deemed to be a payment by or on behalf of the seller or supplier concerned. (5) If any person contravenes any or all of the provisions of sub-sections (1), (2) or (3), he shall be liable to pay, by way of penalty, a sum not exceeding twice the ....
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....the Company and without stating anything about the reasons that might have been shown before the Assessing Authority by the counsel for the Company, the assessment orders / demand notices have been passed. The assessment orders can safely be termed as absolutely non-speaking orders, sans giving the facts only about the functioning of the Company and quoting the provision of law. As such, the impugned orders / demand notices cannot be sustained in the eyes of law. 15. Consequently, the impugned assessment orders dated 19.03.2015, 05.03.2016 and 21.03.2017, as contained in Annexure-2 to these writ applications and the demand notices dated 16.11.2016, 23.04.2016 and 30.08.2017, as contained in Annexure-6 in W.P.T. No.759 of 2017, and Annexure-3 to the other writ applications, and the subsequent garnishee orders, are hereby, quashed. 16. We remand the matter back to the Assessing Authority to pass the reasoned order afresh, after giving proper hearing to the petitioner Company, positively within a period of six months from the date of communication of a copy of this order. 17. It goes without saying that if the petitioner Company is able to make out a case for non-payment of t....