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2023 (2) TMI 936 - HC - VAT and Sales TaxRefund claim - respondent recovered excess amount of advance tax by asking the petitioner to do so and did not frame assessment and refunded the said amount - demand of interest - intent to evade, present or not - HELD THAT:- In the instant case, it is not in dispute that in the previous years on the asking of the department, the petitioner had paid tax in advance. The department also adjusted it while framing assessment for the year 1998-99. It is not a case where the petitioner made payment of excess amount of tax under some mistake. When the excess amount of tax so deposited by him, was refunded by issuing adjustment orders, the petitioner had not received the same and had made prayer for adjustment of the same for the amount of tax for the year 1998-99 which was so adjusted by the respondent. The respondent on one hand recovered excess amount of advance tax by asking the petitioner to do so and did not frame assessment and refunded the said amount only at the time of complying with directions given by this Court in Writ Petition No.2162 of 2000 to frame assessment for the previous years. On the other hand, it started demanding interest qua liability of subsequent years. There was no allegation against the petitioner that it had acted deliberately in defiance of any law or was guilty of any dishonest conduct or had made any attempt to evade payment of rightful tax levied under the provisions of the Act, 1973 - The well settled proposition of law is that penalty either by way of claiming interest or otherwise should not ordinarily be imposed unless the assessee either acted deliberately in defiance or disregard of its obligation. Unquestionably, an authority is competent to impose penalty in case, of a technical or intentional breach of provisions of an Act but where such breach flows from a bona fide belief, then the offender is not liable to act in the manner prescribed by the Statute. The impugned notice as served upon the petitioner thereby raising demand of interest on the amount of Rs.72,89,684/- is not sustainable and is liable to be quashed - Petition allowed.
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