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2023 (2) TMI 889 - HC - VAT and Sales TaxImposition of penalty under Section 40(2) of the JVAT Act - concealment of purchases for an amount of Rs.1,55,69,332/- made by the Petitioner despite the fact that the said amount was duly reflected in its revised return - suppression of facts or not - order was passed without granting sufficient opportunity to the Petitioner - violation of principles of natural justice (audi alterem partem) - HELD THAT:- Admittedly, for the quarter ending September, 2015, the last date for filing of revised return was up-to January, 2016. However, before assessment proceeding was initiated on 09.01.2016 i.e., before the expiry of period of revising of return in dispute which would be itself evident from the penalty order dated 02.02.2016 at Annexure-1. Further, the Petitioner, for the purchases in dispute has utilized Form SUGAM-G and, thus, no occasion arose for suppression of any turnover with intent to evade payment of tax. In the entire Counter Affidavit no mens-rea has been alleged by Respondent-authorities. Thus, it appears that the contention of the petitioner that at best penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon petitioner is correct. This specific plea of Petitioner is uncontroverted by Respondent-authorities. There is no dispute with respect to the fact that before assessment proceeding under Section 40(2) of the JVAT Act and regular assessment proceeding under Section 35 of the JVAT Act are mutually exclusive to each other. However, acceptance of GTO and revised quarterly return in the original assessment proceeding could not be totally brushed aside when the sole issue revolves around revision of return by the Petitioner-company. Admittedly, the present dispute did not pertain to filing of incorrect return with intention to suppress or conceal purchases; rather the dispute pertains to filing of revised return belatedly. Thus, the imposition of penalty under Section 40(2) of the JVAT Act upon Petitioner is not sustainable in the eye of law and if the justification of the Respondents in this regard is accepted then the provision of Section 30 more particularly; sub-section 4 would be rendered otiose. In the given facts and circumstances and in view of specific provision enshrined u/s 30(4) (d) of the Act, it is apparent that there is no deliberate act of evasion of tax which would be warranting imposition of penalty on the petitioner given the language used in Section 40(2) containing the penal provision. In fact it cannot be said to be an act of deliberately filing incorrect returns as the revised return has been duly accepted by the Assessing Officer. Reference in this regard may be made the judgment passed in the case of COMMISSIONER OF SALES TAX, UP. VERSUS SANJIV FABRICS AND HARI OIL & GENERAL MILLS [2010 (9) TMI 461 - SUPREME COURT] wherein the Hon’ble Apex Court has held that burden would be on the revenue to prove the existence of circumstances constituting the offence - mens rea is a condition precedent for levying penalty under Section 10(b) read with Section 10A of the Act. Thus, this court holds that the penalty imposed by the revenue u/s 40(2) of the JVAT Act is not sustainable in the facts and circumstances of this case rather; penalty under Section 30(4)(d) of the JVAT Act could have been imposed upon Petitioner - the amount of alleged penalty of Rs.17,35,000/- already realized from the bank accounts of Petitioner is to be refunded to the Petitioner after deducting Rs.25000/- taking resort of Section 30 (4) of the JVAT Act which prescribes maximum penalty of Rs.25000/-. Application allowed.
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