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2018 (3) TMI 1369 - HC - VAT and Sales TaxDemand of tax refunded earlier - manufacture of refined rice bran oil - obtained de-oiled rice bran as a by-product - partial rebate under Section 17 of the KVAT Act - interest - penalty. Held that: - it is clear that Annexure-C notice issued under section 42 of the KVAT Act is only for the purpose of information to the assessee and has no legal force and the same cannot be enforced. The same is held to be only for the purpose of information. Parallel proceedings initiated by the Deputy Commissioner if any, is not the subject matter of the present proceedings, there is no overlapping as such and hence, the argument of the petitioner on this ground also fails. Penalty - Held that: - It is trite law that penalty is not automatic, while imposing penalty, it is mandatory to provide an opportunity of hearing to the dealer but in the batch of present cases, no such penalty is levied by the prescribed authority. Interest - Held that: - there is a delay caused in making the payment of legitimate taxes to the department. However, levy of interest under Section 36 shall be subject to hearing in the peculiar circumstances of the case on hand. It is true that interest would have been attracted if there is any omission on the part of the dealer if no output tax paid or short paid or higher input tax claimed. The prescribed authority ought to have examined this aspect of the matter in providing an opportunity of hearing to the petitioner. Once indemnity bond is furnished, the payment of tax refunded is mandatory and the same cannot be assailed by the petitioner. Hence, confirming the demand of tax refunded, the matters are remanded to the prescribed authority to examine the levy of interest applicable to the tax demanded. Petition allowed in part.
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