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2016 (2) TMI 1238 - HC - VAT and Sales TaxFailure to declare tax dues - Imposition of penalty equal to 100% tax - Section 53(3) of the A.P. Value Added Tax Act, 2005 - fraud and suppression of facts or not - HELD THAT:- While both Sections 53(1) and 53(3) confer power to impose penalty for under declaration of tax by a dealer, the distinction between the former and the latter is that the ingredients of the latter are attracted where fraud or commission of neglect has been established - In the present case, the show notice does not even allege fraud or commission of wilful neglect. The impugned order, whereby penalty was imposed, does not even state that the dealer had committed fraud or wilful neglect, much less establish its ingredients. In VICEROY HOTELS LIMITED VERSUS COMMERCIAL TAX OFFICER, GENERAL BAZAR CIRCLE, HYDERABAD AND OTHERS [2011 (2) TMI 1311 - ANDHRA PRADESH HIGH COURT], the Division Bench of this Court observed that, while under declaration of tax was liable for penalty under Section 53(1) if fraud or wilful neglect has not been established, and penalty is 10%/25% of the under declared tax, it is only where, in terms of Section 53(3) of the Act, fraud or wilful neglect is established in the under declaration of tax, is the dealer liable to pay penalty equal to the tax under-declared; the jurisdictional facts necessary for imposing penalty under Section 53(3) of the Act must be discernible from the show cause notice; and, in the absence of any such basis being disclosed in the show cause notice, the order levying penalty under Section 53(3) must be set aside. As the SCN in the present case, does not even allege that the petitioner had committed fraud or wilful neglect, the impugned order of penalty must be and is, accordingly, set aside - Petition allowed - decided in favor of petitioner.
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