TMI Blog2023 (2) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, the petitioner had not received the same and had made prayer for adjustment of the same for the amount of tax for the year 1998-99 which was so adjusted by the respondent. The respondent on one hand recovered excess amount of advance tax by asking the petitioner to do so and did not frame assessment and refunded the said amount only at the time of complying with directions given by this Court in Writ Petition No.2162 of 2000 to frame assessment for the previous years. On the other hand, it started demanding interest qua liability of subsequent years. There was no allegation against the petitioner that it had acted deliberately in defiance of any law or was guilty of any dishonest conduct or had made any attempt to evade payment of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the month of April 1998. Previously also, the petitioner used to deposit excess amount as advance tax on the request made by the department and such advance tax was adjusted in the Ist quarter of next financial year. The petitioner received three notices dated 20.10.1999 as issued by respondent No.2 alleging that the petitioner had made short payment of tax amount of Rs.70,19,943/- and had claimed excess payment of Rs.72,89,684/- in the last quarter of 1997-98. The petitioner requested the respondent No.2 to complete the assessment for the previous years 1996-97 and 1997-98 as without framing assessment of those years, it could not complete the assessment for the year 1998-99. The respondent, however, was bent upon framing assessment for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner submitted reply to the said notice alleging that the impugned demand was not sustainable. It has challenged the validity of this notice by making prayer for issuing a writ of certiorari thereby quashing the said notice (Annexure P-10) and also prayed for passing a writ of mandamus thereby directing the respondent No.2 to adjust the amount already paid from the date of accrual of payment. 3. The respondents in their written reply alleged that unless and until the excess amount deposited by the petitioner was quantified, the same could not be adjusted by it in the quarter ending 31.03.1998 of the financial year 1997-98 in the subsequent year 1998-99 as the excess amount, if any, was to be quantified only after the assessment had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act, 1973 with the object to evade payment of rightful tax levied thereunder. In M/s Hindustan Steel Ltd. v. State of Orissa, AIR 1970 SC 253, the Hon'ble Supreme Court while dealing with the considerations relevant for imposition of penalty under the provisions of Orissa Sales Tax had held that the liability to pay the penalty did not arise merely upon the proof of default in registering a dealer. Such a liability could be fastened only where the assessee was shown to have attempted to contravene the provisions of the Act, 1973 with the object to evade payment of rightful tax levied thereunder. 6. In the instant case, it is not in dispute that in the previous years on the asking of the department, the petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot ordinarily be imposed unless the assessee either acted deliberately in defiance or disregard of its obligation. Unquestionably, an authority is competent to impose penalty in case, of a technical or intentional breach of provisions of an Act but where such breach flows from a bona fide belief, then the offender is not liable to act in the manner prescribed by the Statute. 7. In view of this discussion, we are inclined to hold that the impugned notice as served upon the petitioner thereby raising demand of interest on the amount of Rs.72,89,684/- is not sustainable and is liable to be quashed. Accordingly, the writ petition is allowed. The impugned notice Annexure P-10 is set aside and the respondents are directed to not to claim any i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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