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2017 (4) TMI 309 - HC - VAT and Sales TaxWhether in the facts and circumstances of the case the learned Tribunal is right in law and in facts in confirming the order passed by the Revisional Authority imposing penalty u/s 45(6) of the Act which has been imposed upon the Revisional Authority for the first time as the same was not imposed by the AO while passing the original order of assessment? Whether that while calculating / considering the difference of 25% between tax paid and tax payable, while imposing penalty u/s 45(6) of the whether any amount paid by the assessee/dealer is first to be applied towards tax payable as sought to be contended on behalf of the appellant–assessee or the same is required to be first applied towards interest, thereafter for penalty and thereafter for tax as contended on behalf of the Revenue? Held that: - on bare reading of subsection (5) and (6) of Section 45, it is integral part of the assessment and the levy of penalty on the difference of amount of tax paid and amount of tax payable as per the order of assessment or reassessment as the case may be shall be automatic. Therefore, when the penalty on the difference of amount tax paid and tax payable is more than 25% of the amount of tax so paid, there shall be automatic levy of penalty under Section 45(6) of the Act and therefore, no separate notice is required to show cause as to why penalty under subsection (6) of Section 45 may not be imposed. However, a notice may require to be issued while imposing penalty in other cases, more particularly, Section 45(1)(b) When the AO failed to impose the statutory penalty, it can be said that there was an omission on the part of the AO and therefore, the same was revisable by the Revisional Authority in exercise of powers u/s 67 of the Act. Even matter is required to be viewed from another angle. In the present case, even the First Appellate Authority who incidentally was also a Revisional Authority, in fact enhanced the amount of tax payable. The AO levied the purchase tax on lignite at 19.75% while passing the assessment order and the First Appellate Authority held that purchase tax was leviable at 25% and therefore, in fact enhanced demand of tax. Under the circumstances, in the present case even the original assessment order came to be modified by the First Appellate Authority and the tax liability came to be enhanced and therefore, it can be said that the original assessment order merged into order passed by the First Appellate Authority and therefore, also the penalty under Section 45(6) of the Act was leviable/imposable on the difference of tax paid at the time of filing of return and tax payable as determined by the Appellate Authority. Under the circumstances also, penalty imposed u/s 45(6) of the Act is not required to be interfered with. The learned Tribunal has not committed any error in confirming the order passed by the Revisional Authority in imposing the penalty u/s 45(6) of the Act on the difference of amount of tax paid with the return and the amount of tax held to be payable by the Appellate Authority. If the amount paid along with return is first applied towards the tax, the difference of tax shall be less than 25% and therefore, penalty u/s 45(6) of the Act was not imposable is concerned, the aforesaid cannot be accepted. Section 47(4a) and 47(4b) is very clear. That as per the aforesaid provision any amount paid/deposited by the assessee/dealer shall be first applied towards the interest, thereafter the penalty and thereafter, the balance amount, if any, shall be applied/adjusted towards tax liability. Under the circumstances, applying Section 47(4a) and section 47(4b) of the Act, the difference in the amount of tax paid with the return (after deducting the interest of ₹ 28,234/- as per the order passed by the Appellate Authority) and the tax payable would be more than 25% (para 15 of the impugned judgment and order) passed by the learned Tribunal). Under the circumstances, penalty u/s 45(6) is rightly imposed on the difference of tax paid and tax payable. Appeal dismissed - decided against appellant-assessee.
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