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2011 (2) TMI 1317 - HC - VAT and Sales TaxWhether entry 54 of List II of Seventh Schedule to the Constitution of India empowers the State Legislature to enact a provision for the penalty for non-filing of return and non-payment of tax? Whether the said provision, if such a power vests in the State Legislature, could be declared ultra vires on the ground that it is arbitrary and confiscatory in nature and as such, violative of articles 14 and 19(1)(g) of the Constitution of India? Whether the impugned provision is liable to be struck down on the ground of being violative of the principles of natural justice? Held that:- Difficult to agree with the reasoning of the learned single judge who has held that the offending provision is arbitrary, confiscatory in nature, irrational and unreasonable and violative of articles 14 and 19(1)(g) of the Constitution of India. Therefore, the said order of the learned single judge is liable to be set aside and the constitutional validity of section 72(1) of the Act is to be upheld. All the writ appeals are allowed.The order passed by the learned single judge striking down section 72(1) of the Act is hereby set aside.It is declared that section 72(1) of the Act is constitutionally valid. It does not suffer from the vice of arbitrariness, irrationality and is not confiscatory in nature and is not hit by articles 14 and 19(1)(g) of the Constitution of India. The order passed by the learned single judge insofar as quashing of the demand notices and assessment orders stands, but the entire matter is now remitted back.
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