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2014 (6) TMI 974 - HC - VAT and Sales TaxLevy of penalty - classification of goods - “Fryums” - classified as Papads under Entry 36 of the 1st schedule or as food products like pickles and corn flakes as included in Entry 49 of the 3rd schedule or under Entry 103-residuary entry - Held that: - this Court finds that no penalty proceedings can be initiated on the basis of a mere dispute in classification; which, as noticed above, according to the assessee, the Assessing Authority and the Intelligence Officer are under three different entries. Such a debatable issue definitely cannot lead to a presumption of any contumacious conduct on the part of the assessee or a finding of attempt to evade tax. The assessee has made a claim, in turn, which can be rejected or accepted in assessment proceedings - Even on rejection, sufficient grounds do not exist for attracting penalty. Efficacious alternate remedy - Court would not exercise the discretionary jurisdiction under Article 226 of the Constitution of India in cases where there are efficacious alternate remedies; the two well recognized exceptions being violation of principles of natural justice and a proceeding taken under a provision of law which is ultra vires. One another exception would be when the proceeding itself is an abuse of process of law. This Court has not gone into the issue of classification at all, which is best left to the Assessing Officer - petition allowed - decided in favor of petitioner.
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