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2023 (4) TMI 122 - HC - VAT and Sales TaxDiscretionary power for imposition of penalty - Rule 12(4) of the Central Sales Tax (Odisha) Rules, 1957 - concessional rate of tax against declaration in Form ‘C’ - suppression of turnover or not 0- tax periods from 01.04.2010 to 31.03.2012 - HELD THAT:- In the case at hand, nothing has been placed on record indicating that the turnover disclosed in the return has been escaped assessment so as to entitle the assessing authority to impose penalty under Rule12(4)(c) of CST (O) Rules, 1957. But the assessing authority imposed penalty in exercising his discretion and such discretion has been exercised without any reasonable cause. There is a specific finding that the petitioner has not suppressed any turnover which will affect the revenue. It is no doubt true that a discretionary power has been vested with the assessing officer for imposing penalty under Rule 12(4)(c), but when suppression of any turnover or commission of any fraud has not been established, nor the petitioner has been found to have illegally deducted any turnover as exempted sale to affect the tax liability, in that case imposition of penalty under Rule 12(4)(c) cannot have any justification. The discretionary exercise of power amounts to something that is not compulsory, but it is left to discretion of the person or authority involved, such as a discretionary grant. It is opposite to mandatory. Therefore, discretionary is a term which involves an alternative power, i.e., a power to do or refrain from doing a certain thing. In other words, it would be power of free decision or choice within certain legal bounds. If Rule 12(4)(c) provides for exercise of discretionary power for imposition of penalty, the assessing officer should have exercised such discretionary power reasonably. In absence of any rationality or reasonability, exercise of discretionary power can be construed as arbitrary and unreasonable exercise of power by the authority. Therefore, when the first appellate authority examined the fact vis-à-vis contention raised by the parties and came to a definite finding that the petitioner has not suppressed any turnover which will affect the revenue and the discretionary power has been vested with the assessing officer while imposing penalty under Rule 12(4)(c) and in fact there has been no suppression of any turnover or fraud nor the petitioner has been found to have illegally deducted any turnover as exempted sale which will affect the tax liability, it limited the penalty to Rs.30,000/- instead of Rs.1,22,052/- - The learned Tribunal has failed to consider the effect of words “if he is satisfied that the escapement is without any reasonable cause” contained in Rule 12(4)(c) of the CST (O) Rules. But nothing has been placed on record to that extent and, as such, there is no question of levy of two times of penalty in case the assessing authority comes to the conclusion that the escapement is with reasonable cause. Therefore, reduction of penalty by the first appellate authority appears to be improper, when such determination of liability against the petitioner is absolutely based on no record. Penalty is not prescribed for mechanical imposition because law permits such a levy. It is well settled legal position that while interpreting the provisions of the statute, every part of the provisions of the statute has to be given effect to and one part cannot be interpreted in a manner inconsistent with another part of the statute that would defeat the object and purpose of the Act and rules framed thereunder - It is also well-established that where language of any provision in a statute is clear, it is impermissible to vary the language unless the plain and unambiguous language leads to an absurd result. In the present case, the language of Rule 12(4)(c) in unequivocal terms spells out that satisfaction of the Assessing Authority as to the reasonableness of the cause is imperative. In absence of such material borne on record, the very invocation of exercise of power to impose penalty is considered to be flawed. Since penalty is a statutory liability and is substantive in nature, the provisions for imposition thereof are to be strictly construed. It is, therefore, pertinent to put forth the well-accepted principle with regard to strict interpretation. In a taxing statute one has to look at what is clearly said. There is no equity about a tax. There is no intendment. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly on the language used. If the meaning of the provision is reasonably clear, Courts have no jurisdiction to mitigate harshness - The Court is to ascribe the natural and ordinary meaning to the words used by the Legislature and the Court ought not, under any circumstances, to substitute its own impression and ideas in place of the legislative intent as is available from a plain reading of the statutory provisions. The question of law as framed by this Court is answered in the negative, i.e., in favour of the petitioner-assessee and against the State of Odisha-Revenue - the sales tax revision petition allowed.
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