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2023 (4) TMI 148 - ORISSA HIGH COURTLevy of penalty under Section 7(5) of the OET Act - rejection of revised return and enhancement of turnover on valid materials and evidence and the books of accounts maintained by the petitioner - absence of any adverse material on record - HELD THAT:- In view of the meaning attached to the word ‘penalty’ under different provisions of different taxing statute, in an unequivocal term it can be held that the ‘penalty’ ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute. Above being the meaning attached to the word “penalty”, if that would be taken into consideration in the present context, without accompanying the revised return, no best judgment assessment could be done by the Assessing Authority. As such, no reason for rejection of revised returns has been pointed out by the Assessing Authority. More so, no reasons have been assigned as to why the penalty will be imposed under Section 7(5) of the O.E.T. Act. Even against the order of assessment when appeal was preferred, the Appellate Authority though quashed the same, but in the Second Appeal the Tribunal set aside the order passed by the Appellate Authority and confirmed the order passed by the Assessing Authority which clearly indicates that the same has been passed by the Tribunal without any application of mind. Once the Assessing Authority has come to a conclusion that there is no mistake in the books of account, imposition of penalty under Section 7(5) of the O.E.T. Act cannot be sustained in the eye of law. There is no dispute that the Assessing Authority initiated proceeding under the O.S.T. Act but not under the O.E.T. Act. By asking information without proper manner cannot be treated as initiation of proceedings against the petitioner. As such, the Assessing Authority has committed error without initiating the proceeding under O.E.T. Act and without issuing notice to the petitioner under the O.E.T. Act - This Court in similar circumstances in the case of RAM KISHAN RAJKUMAR VERSUS ASSESSING AUTHORITY, CUTTAK-I WEST CIRCLE, CUTTACK AND ANOTHER [2004 (6) TMI 600 - ORISSA HIGH COURT] has interfered with the assessment under Section 7 of the O.E.T. Act read with Rule 15 of the O.E.T. Rules (as it stood at the relevant point of time) and quashed the order of assessment. Therefore, the assessment which has been made for imposition of penalty cannot be sustained in the eye of law. No doubt, the petitioner has filed all the monthly statements and returns, as shown in the monthly statements and also paid due admitted tax before filing the said return. As such, the petitioner is in no way a defaulter in payment of admitted tax under the O.E.T. Act. Therefore, the provisions contained under Section 7(5) of the O.E.T. Act is not applicable. The question is answered in favour of the assessee-petitioner and against the Department - revision allowed.
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