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2022 (2) TMI 788 - MADRAS HIGH COURTQuantum of penalty under section 10(A) of the CST Act - petitioner availed tax concession at the reduced rate of Central Sales Tax at 4% by issuing Form 'C' declaration for certain items, which were not covered in the Form 'B' registration certificate issued by the second respondent to them - HELD THAT:- The petitioner admitted its liability to pay tax for the purchases made in respect of goods that were not covered under Form 'B' registration certificate issued by the second respondent. They disputed only the quantum of penalty levied by the authorities below. Therefore, this court is inclined to look into the orders of the authorities below to that extent alone. It is seen that the assessing officer, after inspection and verification of records, found that the petitioner claimed concessional rate of CST at 4% by issuance of form 'C' declaration in respect of certain items that were not covered under the certificate of registration in form 'B' issued to them by the second respondent and thereby committed the offence as contemplated under section 10(b), warranting penalty under section 10(A) of the CST Act, 1956 - there was no false representation as alleged by the department and the concept of 'mens rea' would not arise for levy of penalty under section 10(A) of the CST Act. Being dissatisfied with the explanation submitted, the assessing officer ultimately completed the assessment, levying penalty at the rate of 150% of the tax due. The Tribunal after detailed analysis, came to the conclusion that there was mensrea on the part of the petitioner and hence, they were liable to pay penalty. At the same time, the Tribunal observed that the penalty levied by the assessing officer, was too excessive and therefore, the same was modified by restricting to 100% and not 150% - considering the fact that the petitioner made applications seeking amendment of the Form B registration certificate, which disclosed that they had made inter-state purchases on the bonafide impression that the disputed items would have been included in the Form B registration certificate issued by the second respondent; and subsequently, they had admitted their liability to pay tax in respect of the disputed items, this court is of the opinion that the levy of penalty has to be modified by restricting it to 50%, instead of 100% as done by the Tribunal. Petition disposed off.
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