TaxTMI 
TaxTMI 
2026 (5) TMI 861
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.... Ms.Amirtha Poonkodi Dinakaran Government Advocate In W.P.Nos.3206, 3211, 4088, 4101 and 4097 of 2026 For the Petitioners (In all W.Ps) : Mr.S.Durairaj For the Respondent (In all W.Ps) : Mr.C.Harsharaj Special Government Pleader In W.P.Nos.4107, 4113, 4117 and 3963 of 2026 For the Petitioners (In all W.Ps) : Mr.S.Durairaj For the Respondent (In all W.Ps) : Mrs.P.Selvi Government Advocate In W.P.Nos.2912, 2925, 2927 and 2982 of 2026 For the Petitioner (In all W.Ps) : Mr.S.Durairaj For the Respondent (In all W.Ps) : Mr.V.Prashanth Kiran Government Advocate COMMON ORDER Ms.Amirtha Poonkodi Dinakaran, learned Government Advocate takes notice for the Respondent in W.P.Nos.2628, 2630, 2633, 4191, 3953 and 3949 of 2026, Mr.C.Harsharaj, learned Special Government Pleader takes notice for the Respondent in W.P.Nos.3206, 3211, 4088, 4101 and 4097 of 2026, Mrs.P.Selvi, learned Government Advocate takes notice for the Respondent in W.P.Nos.4107, 4113, 4117 and 3963 of 2026 and Mr.V.Prashanth Kiran, learned Government Advocate takes notice for the Respondent in W.P.Nos.2912, 2925, 2927 and 2982 of 2026. 2. These Writ Petitions are being disposed of at the tim....
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....ctive Petitioners and the alleged fake sales for passing such ineligible Input Tax Credit. 6. By the impugned Orders, the penalty imposed equivalent to the Input Tax Credit availed on circular trading is as detailed below:- Sl. No. W.P. No. Name of the Writ Petitioner Tax Period Tax liability Section 122(1)(vii) Circular Trading Penalty Section 122(1)(ii) Circular Trading Penalty 1. 2927/2026 New Life Health Care products 2021-2022 0 Rs.2,21,303/- Rs.2,51,390/- 2. 2982/2026 2022-2023 0 Rs.61,77,750/- Rs.63,71,278/- 3. 2925/2026 2023-2024 0 Rs.91,18,860/- Rs.88,49,748/- 4. 2912/2026 2024-2025 0 Rs.55,28,204/- Rs.56,11,642/- 5. 2633/2026 SAM Enterprises 2022-2023 0 Rs.67,50,188/- Rs.68,67,902/- 6. 2628/2026 2023-2024 Ineligible ITC Tax - Rs. 1,09,378/-, Penalty - Rs. 1,09,378/- Rs.1,13,69,354/- Rs.1,15,73,454/- 7. 2630/2026 2024-2025 Section 125 Penalty - Rs. 50,000/- Rs.59,77,222/- Rs.96,44,040/- 8. 4088/2026 Sri Sana Enterprises 2021-2022 Sales Suppression Tax - Rs. 3,59,234/-, Interest - Rs. 1,81,762/-, Penalty -....
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....s initiated not from the period of registrations for all tax payers except Tvl.Sana Enterprises) Tax Payer (Tvl.) Purchase Sales Total Turnover Circular Trading Turnover CT (%)* Total Turnover Circular Trading Turnover CT (%)* Q-Tech Surgical Products 60,69,85,014 59,73,98,949 98.4 61,56,22,612 61,25,02,970 99.4 Sana Enterprises 48,62,07,142 47,74,90,999 98.2 49,33,49,598 48,91,05,473 99.1 Med Aid Healthcare 50,24,42,195 50,12,54,958 99.7 42,82,87,058 42,75,91,358 99.8 M.S.Global Health Care 37,85,36,536 37,74,81,894 99.7 38,43,78,733 38,43,78,733 100 New Life Health Care 42,95,56,755 41,51,25,504 96.6 42,16,00,622 42,16,00,622 100 SAM Enterprises 48,38,70,563 48,33,58,801 99.8 56,17,07,864 56,17,07,864 100 Infix Global Health Care LLP 24,56,55,110 24,56,55,110 100 25,51,91,310 25,51,91,310 100 3,13,32,53,315 3,09,77,66,215 3,16,01,37,797 3,15,20,78,330 (* CT refers to Circular Trading) The above table shows that the above tax payers are invo....
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....n who have received limited benefits under the order passed by the Division Bench of the High Court. 43. For the foregoing reasons, we hold that neither the learned Single Judge nor the Division Bench of the High Court was justified in interfering with the action taken by the Management and the award passed by the Labour Court, Coimbatore which was strictly in consonance with law. In peculiar facts and circumstances of the case and in exercise of power under Article 142 of the Constitution, we do not disturb the final order passed by the Division Bench of the High Court on 3-11-2004 in Writ Appeal No. 45 of 2001. 44. The appeal is accordingly disposed of in the above terms. In the facts and circumstances of the case, there shall be no order as to costs." 13. In Charanjit Lamba case (referred to supra), the Hon'ble Supreme Court in Paragraph Nos.18 to 25 has observed as under:- "18. We may refer to the decision of this Court in M.P. Gangadharan v. State of Kerala [(2006) 6 SCC 162] where this Court declared that the question of reasonableness and fairness on the part of the statutory authority shall have to be considered in the context of the factual ma....
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....have interfered with the sentence imposed upon the appellant on the doctrine of proportionality. Our answer is in the negative. 22. The appellant was holding the rank of a Major in the Indian Army at the time he committed the misconduct alleged and proved against him. As an officer of a disciplined force like the Army he was expected to maintain the highest standard of honesty and conduct and forebear from doing anything that could be termed as unbecoming of anyone holding that rank and office. Making a false claim for payment of transport charges of household luggage and car to Chandigarh was a serious matter bordering on moral turpitude. Breach of the rule requiring him to clear his electricity dues upon his transfer from the place of his posting was also not creditworthy for an officer. The competent authority was therefore justified in taking the view that the nature of the misconduct proved against the appellant called for a suitable punishment. 23. Inasmuch as the punishment chosen was dismissal from service, the competent authority, did not in our opinion, take an outrageously absurd view of the matter. We need to remember that the higher the public office ....
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.... 32. So far as Charge 4 is concerned, the matter was considered by a Board consisting of several officers and the appellant could not have been selectively targeted for disciplinary action. Further, no material could be placed on record that BSF had ever formulated a policy for regularisation of a temporary teacher as a regular teacher and in such a fact situation, the appellant could not have regularised the services of Shri Majumdar as a school teacher, even if he had the experience of 10 years. (This was not even a charge against the appellant nor was there any finding of the inquiry officer, nor has such a matter been agitated before the Tribunal.) 33. It is evident from the record that as per Letter dated 4-4-2013 sent by the Government of India to the appellant through the Chief Secretary, Andhra Pradesh, the proposed punishment is as under: "A penalty of withholding two increments for one year without cumulative effect, be imposed on the appellant as a punishment under Rule 6 of the All India Services (Discipline and Appeal) Rules, 1969." 34. The proved charges remained only Charges 4 and 6 and in both the cases the misconduct seems to be of ....
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....and contextual difference between Section 271(1)(c) and Section 276-C of the IT Act was lost sight of in Dilip Shroff case. 18. The Explanations appended to Section 271(1)(c) of the IT Act entirely indicates the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The judgment in Dilip N. Shroff case has not considered the effect and relevance of Section 276-C of the IT Act. Object behind enactment of Section 271(1)(c) read with Explanations indicate that the said Section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under Section 276-C of the IT Act. 19. In Union Budget of 1996-1997, Section 11-AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In Para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. 20. Abo....
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....ication. There is another very strong person for holding that Dharamendra Textile could not have interpreted Section 11-AC in the manner as suggested because in that case that was not even the stand of the Revenue. 34. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11-AC would depend upon the existence or otherwise of the conditions expressly stated in the Section, once the Section is applicable in a case the Authority concerned would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under Sub-Section (2) of Section 11-A. That is what Dharamendra Textile decides. It must, however, be made clear that what is stated above in regard to the decision in Dharamendra Textile is only insofar as Section 11-AC is concerned. We make no observations (as a matter of fact there is no occasion for it!) with regard to the several other statutory provisions that came up for consideration in that decision." 18. To arrive at the above conclusion, one has to read the discussion in Paragraph Nos.30, 31, 33 and 35 of the aforesaid Judgment. They are reproduced below:- ....
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....ision in Dharamendra Textile case the Court noted the submission made on behalf of the Revenue as follows: "6. Mr.Chandrashekharan, Additional Solicitor General submitted that in Rules 96-ZQ and 96-ZO there is no reference to any mens rea as in Section 11-AC where mens rea is prescribed statutorily. This is clear from the extended period of limitation permissible under Section 11-A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11-A deals with the time for initiation of action. Section 11-AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud, etc., relate to the extended period of limitation and the onus is on the Revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the Revenue, the assessee is exposed to penalty and the quantum of penalty is fixed. It is pointed out that even if in some statutes mens rea is specifically provided for, so is the limit or imposition of penalty, that is, the maximum fixed or the quantum has to be between two limits fixed. In the cases at hand, there is no....
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....xcise Act, 1944 which fell for consideration is the above-mentioned decision of the Hon'ble Supreme Court is different from Section 122 of the respective GST Enactments. The Hon'ble Supreme Court in Union of India Vs. Rajasthan Spinning and Weaving Mills, (2009) 13 SCC 448, has pointed out that the ratio was confined to Section 11-AC of the Central Excise Act, 1944 and no observations with regard to the several other statutory provisions that came up for consideration in that decision. 25. For the sake of clarity, Section 122(1)(vii) of the Central Goods and Services Tax Act, 2017 and Section 11-AC of the Central Excise Act, 1944, which fell for consideration in these two decisions are extracted hereunder:- Section 122 of the Central Goods and Services Tax Act, 2017 Section 11-AC of the Central Excise Act, 1944 which fell for consideration in Dharamendra Textiles Processors case (referred to supra) and Rajasthan Spinning and Weaving Mills case (referred to supra) 122. Penalty for certain offences: (1) Where a taxable person who i. supplies any goods or services or both without issue of any invoice or issues an incorrect or false invoice with regard to any su....
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....r increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purpose of this section, the duty as reduced or increased, as the case may be, shall be taken into account: Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court then the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty-five per cent, of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation.- For the removal of doubts, it is hereby declared that- (1) the provisions of this section shall also apply to cases in which the order determining the duty under sub-section (2) of Section 11-A, relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (2) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso ....