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2015 (3) TMI 301 - HC - VAT and Sales TaxTribunal set aside the mandatory penalty on the ground of unnecessary harassment - non-filing of returns where the appellant is not liable to pay tax under DVAT - Whether the DVAT Tribunal acted correctly in holding that in the absence of rules under Section 59(2) of the DVAT Act, 2004 (hereafter referred to as "the Act"), penalty action under Section 86(14) for non-compliance with Sections 59(1), (2) and (3) could not have been initiated and taken - Held that:- Substantive powers to require production of records imply a substantive obligation to maintain books and other documents - the corresponding right of the Commissioner is located in Section 59(1); Section 59(2) is not compulsive but only enabling. This is evident from the use of the expression, "the Commissioner may". In other words, the proceedings for violation of Section 59(1) are not dependent on the existence otherwise of rules which may or may not be framed in the given fact situation. The Court’s view is supported by the decisions - Gannon Dunkerley and Co. and Ors. v. State of Rajasthan and Ors. [1992 (11) TMI 254 - SUPREME COURT OF INDIA]; Sudhir Chandra Nawn v. Wealth Tax Officer, Calcutta and Ors. [1968 (4) TMI 1 - SUPREME Court] and Mahim Patram Pvt. Ltd. v. UOI [2007 (2) TMI 73 - SUPREME COURT OF INDIA]. - interference with the ultimate order setting aside the penalty of ₹ 50,000/- is not warranted. - Appeal disposed of.
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