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2014 (6) TMI 207 - MADRAS HIGH COURTPenalty under section 10(b) of the CST Act - Penalty @ 150% tax liability - Whether the Tribunal was justified in reversing the order passed by the Appellate Assistant Commissioner in deleting the penalty levied - Held that:- assessing officer while issuing notice dated October 21, 2005 did not make any specific allegation that there was an element of mens rea on the part of the assessee and that the conduct of the dealer was contumacious and they have deliberately violated the statutory provisions and what is stated is that the said item of machinery was not included in the CST registration certificate. The assessee in response to such notice submitted their explanation on November 5, 2005 setting out the fact that owing to the bona fide circumstances, they thought they would be entitled to the concessional rate of tax of four per cent. To substantiate such claim, the affidavit of the accounts officer of the assessee was also filed. The assessing officer did not outrightly reject the explanation offered by the assessee, but proceeded to partially accept the same and reduced the levy of penalty to 100 per cent though the proposal was 150 per cent. Tribunal, while considering the appeal filed by the State, did not examine the facts of the case thoroughly rather it gave a peculiar finding that the assessee ought to have been careful enough to issue C form declaration only in respect of such goods, which are authorised in the form B certificate issued to them. Such a finding would not be sufficient to uphold the penalty levied by the assessing officer - Order of Tribunal erroneous - penalty waived - Decided in favour of assessee.
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