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VAT and Sales Tax - Case Laws
Showing 81 to 100 of 929 Records
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2018 (12) TMI 352 - KERALA HIGH COURT
Compounding of tax - voluntarily switched over to regular assessment - case of assessee was that the assessee was coerced into agreeing for the compounding of the offence - Limitation.
Whether the assessee would have agreed to payment of such a compounding fee, especially in the context of the assessee having challenged the original order itself on the ground of coercion? - Held that:- This is a fit case where this Court should exercise discretion insofar as denying the Department the right to make any revision of the compounding fee which already has been accepted by the assessee and amounts paid.
Disentitlemnet of the regular assessment made on the assessee being dis-entitled to continue the compounding under Section 8(c) due to the commencement of the beer and wine parlour - Held that:- The assessee could take a contention that there should be a cancellation first effected before the regular assessment is made. On the assessee obtaining a beer and wine parlour licence and commencing the sale, the entitlement to continue compounding under Section 8(c) automatically stands extinguished. There is absolutely no requirement of cancellation first before a regular assessment is taken up. We reject the contention so raised.
Limitation - Held that:- Limitation raises mixed questions of fact and law. But in the present case, there is no dispute on facts. The relevant facts are only the subject assessment year as also the date on which the Department initiated proceedings to determine the taxable turnover under Section 25(1) based on the detection of the dis-entitlement of the assessee to continue under the compounding scheme - the question of limitation is only a question of law.
Assessment order set aside - appeal allowed - decided in favor of appellant.
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2018 (12) TMI 351 - KERALA HIGH COURT
Rate of tax - Classification of goods - plastic trays, containers, box and bowls - whether fall under Entry 174 of List A of Third schedule bearing HSN Code 3923 and are taxable at the rate of 5% - Held that:- The containers, trays and bowls made of plastic cannot be said to be either a tin, bag or cover. The plastic containers, trays and bowls having not been included in any of the entries and the specific eight digit HSN Code 3923.90.90 under the Customs Tariff Act also having not been included under Entry 174, it cannot be said that the containers, trays and bowls which fall under the Tariff Entry 3923 as against eight digit HSN Code 3923.90.90 is also included under Entry 174 of List A of Third Schedule under the KVAT Act.
The main heading under Entry 174 is not aligned to the four digit HSN Code and the eight digit HSN Code under 3923.90.90 is not aligned against any of the sub-entries under Entry 174.
The Commissioner has correctly found that the said goods do not come under either Sl.No.3 or 3A - We have extracted those goods which come under Sl.No.3 or 3A herein above, which do not include either of the goods now arising for our consideration in the appeal; being containers, trays and bowls. The said commodities do not also fall under Entry 174 packing materials and hence necessarily the same has to be taxed under the residuary entry of SRO 82/2006.
The impugned order in the above case being a continuation of the proceedings under Section 94, there can be no prospectivity declared for the same.
Appeal dismissed - decided against Appellant.
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2018 (12) TMI 350 - KERALA HIGH COURT
Input tax credit - raw material purchased for generation of electricity - electricity is included as an exempted item under Schedule I of the Kerala Value Added Tax Act - prohibition u/s 11(5) under KVAT Act - Held that:- In the present case, the said prohibition would have been applicable, if the manufactured electricity was sold by the assessee, on which there is no levy of tax. As far as the assessee is concerned, the entire electricity generated is captively consumed for manufacturing purposes and for electrifying the factory premises. Hence the proportion of the raw material employed in the production of electricity, used in the manufacturing process of newsprint, is an input used in the manufacture of the final product of the assessee being newsprint, which is assessable to tax under the KVAT Act.
The assessee is entitled to claim input tax credit. In this context, it is also to be noticed that electricity though included under the First Schedule is specifically excluded from the definition of “goods” as available under Section 2(xx) of the KVAT Act.
The assessee would also be liable to produce sufficient documents to prove the payment of tax on purchase of raw material for which input tax credit is claimed. The assessee should also produce sufficient materials before the Assessing Officer to segregate the percentage of electricity used for manufacturing purpose and for illuminating purpose. If the assessee is not able to produce such material to the satisfaction of the Assessing Officer, then on best judgment, the Assessing Officer could determine the proportion of the electricity used in the manufacturing process and in illuminating the factory premises. The input tax credit can be allowed only insofar as the raw materials used for production of electricity, employed in the manufacturing process.
Decided against Revenue.
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2018 (12) TMI 300 - KERALA HIGH COURT
Assessment under Compounding scheme as per the returns - exemption with respect to the labour contracts - Held that:- The assessee had applied under the compounding scheme under Section 8 of the KVAT Act, 2003 and had been granted permission to pay tax at the compounded rates. As has been found by the Tribunal, the assessee cannot turn around and challenge such benefit availed on the assessee's own application especially after the assessment year is over - revision dismissed.
Addition made of suppression and omission - failure to produce books of accounts - Held that:- The Assessing Officer had granted an opportunity to the assessee to produce books of accounts and the agreements evidencing the turnover, of the contracts awarded to the assessee. The assessee had failed to produce the same. It was in such circumstances that the Assessing Officer had made an addition for probable omission and suppression. The addition made for probable omission and suppression would be akin to the addition made on an actual detection of suppression; especially when it is on account of failure of the assessee to produce the books of accounts - The Tribunal had merely noticed that there was no reason to discredit the compounding permission granted and that alone would not be sufficient ground to delete the addition made by the Assessing Officer on best of judgment - the addition made for probable omission and suppression at the equal amount is restored.
Revision is partly allowed restoring the estimation made but however, making it clear that for the conceded turnover, tax would be levied under Section 8 and for the quantum made addition of; tax would be levied at the regular rate but after giving deduction under Rule 10 of the KVAT Rules - decided partly in favor of the State and partly in favor of the assessee.
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2018 (12) TMI 299 - KERALA HIGH COURT
Imposition of penalty - CST Act - purchase tax not paid - exemption under Annexure A notification claimed - invocation of Section 67 of the Kerala Value Added Tax Act, 2003 - Held that:- In the present case, admittedly, an audit report was filed and after that penalty proceedings were initiated noticing the discrepancy and the revised returns were filed after the penalty proceedings were initiated. Hence the assessee failed to correct the mistakes in the return by filing a revised return along with the audit report; which was what is enabled by Section 42. The assessee attempted revision of returns only after penalty proceedings were issued, which is not permissible as per the proviso to Section 42(2). The proviso stands against the assessee and there could be no revised return accepted by the Assessing Officer against the clear mandate of the statutory provision.
Invocation of section 67 - Held that:- Section 10A applies to a purchasing dealer and these are specific offences enumerated under Section 10, none of which is attracted here. Here the offence is of evasion of tax payable under the CST Act, on the interstate sale of rubber, by claiming an exemption without complying with the condition of the exemption notification. The penalty imposed under the CST Act is only proper - decided in favor of Revenue.
Revision dismissed.
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2018 (12) TMI 298 - KERALA HIGH COURT
Review of Order - power of Tribunal constituted with the Chairman and one members to review an order of the Tribunal constituted of the Chairman and two members - cope of review u/s 39(7) of the Act - reopening/reassessment of an assessment after the limitation provided of four years.
Held that:- We cannot but observe that the two member Bench of the Tribunal ought not to have attempted a review of an order passed by a three member Bench. Even with respect to a co-ordinate bench, Section 39(7) of the Act is the power conferred on the Tribunal to carry out a review of its own orders - Tribunal constituted of two members to have acted without judicial propriety in having considered review of an order passed by a three member Bench.
The specific power granted for review to an Appellate Tribunal does not even include correction of errors apparent on the face of the record. For rectification of errors, there is a specific provision under Section 43 of the Act. The petition filed herein is under sub-section (7) of Section 39 of the Act, which allows a review only on the basis of the discovery of new and important facts, which, after the exercise of due diligence, were not within the knowledge of the review petitioner or could not be produced by him. There is no new or important facts, which were urged before the Tribunal on review - the review to be one not maintainable for reason of the ingredients under sub-section (7) of Section 39 of the Act being absent - decided against Revenue.
Revision allowed.
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2018 (12) TMI 297 - KERALA HIGH COURT
Liability of Sales tax - transaction of sale taking place or not - source of miscellaneous income not proved - addition made on Gross Profit - Held that:- Unless there was sufficient material to show that a particular transaction was one of sale of goods, there could be no turn over addition made for the purpose of imposition of Sales Tax.
For the purpose of levy of sales tax, it would be necessary to show not only that the source of money has not been explained but also the existence of some material to indicate that the acquisition of money by the assessee has resulted from transactions liable to sales tax and not from other sources.
The assessee herein had taken a specific contention with respect to the miscellaneous income being income generated from real estate business; which could be easily proved by production of documents. The assessee having failed to so prove the transactions which geerated the income, with documents and materials available with the assessee, the Assessing Officer was perfectly justified in drawing an adverse inference - decided in favor of Revenue.
Addition made on Gross Profit - Held that:- The books of accounts shows the amounts as miscellaneous income. The income if derived from the dealership, would definitely include gross profit. The addition made of gross profit, to the income disclosed, is not sustainable - decided in favor of Assessee.
Decided partly in favor of Revenue.
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2018 (12) TMI 296 - KERALA HIGH COURT
Refund of the amounts paid at the time of admission - amounts paid on the basis of an estimation made of the toll charges, which could have been collected on operation of the toll for a period of 19 years - Compounding of Offences - Cancellation of suo moto order - Held that:- In the present case, it is not clear from the assessment order as to the date on which the application for compounding was filed in the year 1999-2000. Further, the application stood allowed by the AO when the assessment order was passed in the year 2004. There was admittedly payment before the AO of the tax at the compounded rate on receipts by the assessee.
The Deputy Commissioner, invoking powers of suo motu revision had merely directed denovo assessment for reason of audited balance-sheet having not been filed and there being a shortfall of turnover. Denovo assessment can only be under the compounding scheme/provision, since admittedly tax was paid at the compounded rate and in any event, atleast, at the time of assessment the application for compounding was allowed by the AO; which was not the subject of suo motu revision.
Sub-rule (1) of Rule 30 speaks of an application to be filed at the commencement of the year, at least before the first of May of that assessment year. Form Nos. 21 and 21A also indicate that the permission is granted for a specific period; mostly the assessment year. Rule 30 and the Forms prescribed thereunder are period specific; while Rule 30A and the Forms prescribed thereunder are contract specific, is the contention of the assessee, which we are inclined to accept. If that be so, when the compounding has been applied for the first year, necessarily, it has to be applied in the second year also, when the very same contract is continued in the second year.
The cancellation of the suo motu order is set aside - The refund shall be only after the working of the assessments under the compounding scheme and under the regular scheme - appeal allowed in part.
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2018 (12) TMI 231 - ALLAHABAD HIGH COURT
Jurisdiction to initiate or impose penalty - Whether SCN having been issued; goods having been seized and penalty having been first imposed solely on the seller (Ex-U.P. dealer) vide order dated 08.11.2013 and no liability having been fixed on the assessee in those proceedings, there survived any jurisdiction to initiate or impose penalty on the assessee there after under Section 54(1) (14) of U.P. VAT Act, 2008? - Held that:- It emerges from a plain reading of statute that the penalty under Section 54(1)(5) may be imposed if the Assessing Officer 'is satisfied' that 'any dealer or other person' had committed the wrong described under various clauses of subsection (1) of Section 54. Therefore, in the first place, for a valid penalty to arise, the Assessing Officer must record his satisfaction in that regard. Then the satisfaction must arise with respect to a person who may be a dealer or any other person as well. With reference to clause (5) of sub-section (1) of Section 54, it is seen that the penal event arises if the person being subjected to penalty imports or attempts to import or abets to import any goods in contravention of Section 50, 51 of the Act, with a view to evade payment of tax.
Admittedly, besides the fact that the penalty order was made at the hands of the ex-U.P. selling dealer, to the exclusion of the assessee, the Assessing Officer first drew up penalty proceedings and passed penalty order on 08.11.2013 solely against that selling dealer. In that order, copy of which has been brought on record by means of a supplementary affidavit, the satisfaction is seen to exist solely against that dealer to the exclusion of any allegation or suspicion of infringement of law committed by the assessee. Thus, the satisfaction contemplated under Section 54(1) of the Act was recorded by the Assessing Officer on 08.11.2013 against the selling dealer only - That having been done, there survived no occasion or jurisdiction for the Assessing Officer to draw up any other or further proceedings. The power to impose penalty stood exhausted.
Once the Assessing Officer recorded his satisfaction of infringement having been made with respect to the present transaction, solely by the selling dealer, it did not survive on him to record a contrary or another satisfaction as to infringement made by the assessee with respect to that transaction - However, if the Assessing Officer intends to draw a finding contrary to that recorded during the seizure proceedings so as to rope in another person (who had not been visited with the seizure order), such intent must get expressed at the first instance, i.e. while issuing penalty notice or at least before passing penalty order. However, no final opinion is being expressed in this regard, in view of the fact, in the instant case no notice was issued to the assessee during pendency of the penalty proceedings against the seller.
Penalty stands deleted - revision allowed.
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2018 (12) TMI 230 - DELHI HIGH COURT
Jurisdiction - Scope of Inter-state sales - supply of the goods from Mumbai to Delhi to execute the works contract - CST Act, 1956 - applicability of Delhi Sales Tax Act, 1975 - Held that:- This Court is of the opinion that the appreciation of the law by the Tribunal in this case is sound and unexceptionable. The placement of an order by the agent for procurement of the lifts in this case was merely an offer. It is only upon its acceptance and further steps taken by the supplier that an offer crystallizes into a binding promise or contract. That took place in Mumbai.
It is now too far well settled that the incidence of Central Sales Tax or even sale of goods, occurs where the goods are appropriated to the contract. In this case, the place where the appropriation took place, is undoubtedly Mumbai.
Appeal dismissed.
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2018 (12) TMI 229 - MADHYA PRADESH HIGH COURT
Confiscation of goods - scope of transporter - illegal transportation of goods - confiscation of vehicle when the offence was compounded by the transporter and the goods which were being transported in the vehicle were released - Section 57 of 2002 Act - compounding of offence - Held that:- Explanation (ii) under Section 57 of 2002 Act defines expression “transporter” which includes “the owner of the vehicle carrying the goods, whether an individual, a firm, association, society or company, and the Manager, if any, of such owner.”
In the present case as evident from the facts adverted at, with the admission of guilt and having paid twice the amount of penalty, the collusion with the dealer involved in avoidance or evasion of tax stood established beyond any iota of doubt. The contention that with the compounding of offence the illegality gets validated and that an action under sub-section (9) of Section 57 of 2002 Act is not attracted is taken note of and rejected at the outset. The depositing of penalty which is twice the amount of tax establishes the factum that the transporter in possession or in control of goods has colluded with the dealer who evades the tax, which attracts action under sub-section (9) of Section 57 of 2002 Act.
Trite it is that in construing provisions designed to prevent tax evasion, if the legislature uses words of comprehensive import, the Courts cannot proceed on an assumption that the words were used in a restricted sense so as to defeat the avowed object of the legislature.
A penalty provision in a taxing statute, as held in Gujarat Travancore Agency, Cochin Vs. Commissioner of Income Tax, Kerala, Ernakulam [1989 (5) TMI 1 - SUPREME COURT], is not to be equated to a criminal statute requiring impliedly the element of mens rea and unless there is something in the language of the Act indicating needs to establish mens rea.
There is no substantial question of law, as proposed, arises for consideration - appeal dismissed.
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2018 (12) TMI 148 - BOMBAY HIGH COURT
Exemption from payment of sales tax - supply of the specified drugs to WHO - Sub-section 3 of Section 6 of CST Act - Held that:- If the sales had been made to WHO, the exemption from payment of tax in terms of Sub-section 3 of Section 6 would have been available.
In the present case, as a matter of fact concurrently and if we may add correctly the Revenue Authorities and the Tribunal have come to the conclusion that the sale was not made by the assessee to WHO. Sub-section 3 of Section 6 of the CST Act, therefore, would not apply.
Reference to the proviso to Sub-section 1 of Section 6 also would not help the assessee. As per the said proviso, irrespective of the provisions contained in Sub-section 1 a dealer would not be liable to pay tax on any sale of goods on sale in course of export of the goods out of the territory of India. In order to claim this benefit, therefore, the sale had to be export sale of goods travelling out of territory of India. The Tribunal, therefore, correctly did not accept this contention.
The interplay of the provisions of the Sub-section 3 and Sub-section 1 of Section 6, in the present case would lead to some what harsh consequences. However, when the provisions of law are clear, the consequences cannot be avoided - appeal dismissed.
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2018 (12) TMI 147 - BOMBAY HIGH COURT
Valuation - includibility - works contract sales - composition amount - whether the amount of service tax charged separately in the invoice will not be included in total contract value? - Held that:- Once the State has accepted that service tax would not form part of the sale price and informed the trade, the same would bar the Revenue from taking a contrary view. The State has to apply the law uniformly to all the assessees.
Appeal not entertained and is dismissed.
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2018 (12) TMI 146 - MADRAS HIGH COURT
Preference of Charge on Mortgaged property - TNGST Act - who holds first charge as to whether the crown debt / the revenue to the government under the fiscal laws or the claim of secured creditors under SARFESAI Act? - Held that:- The issue is laid to rest by the decision of the Hon'ble Supreme Court in the case of Central Bank of India vs. State of Kerala & Others [2009 (2) TMI 451 - SUPREME COURT OF INDIA] where it was held that the statutory charge prevail over mortgage charge over any pledged property.
The crown debt is treated as unsecured and mortgage rights will get priority only when the statute does not create a charge under the Act.
It is also settled that the non obstante clauses of the Tamil Nadu General Sales Tax Act, 1959, and the SARFESAI Act are not at conflict with each other as both the statutes can be given effect harmoniously through purposive interpretation. Accordingly, those statutes under which a charge is created on the assets will have priority over mortgage rights under any other Act. And those statutes where charges are not created will be accorded a status of unsecured debts and will have low priority over the secured creditors under the SARFESAI Act - The Tamil Nadu General Sales Tax Act, 1959, having created charge on the assets of the assessee by virtue of Section 24, the interest of revenue cannot be separated from the assets of the defaulters.
Petition dismissed - decided against petitioner.
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2018 (12) TMI 100 - ALLAHABAD HIGH COURT
Penalty u/s 34(8) of the U.P. Vat Act, 2008 - assessee had, of its own and prior to issuance of any notice, cleared the default in payment of T.D.S. amount together with interest - Held that:- Though the language of section 34(8) of the Act does not admit any element of concealment as an ingredient for the penalty imposable under that provision of law, at the same time it clearly does not appear to suggest that in every case of default, in either making a deduction or in timely depositing the T.D.S. amount, the defaulting assessee must, as a matter of principle, be penalised - The word 'shall' used to provide for the effect or consequence of the penalty order cannot be read out of context to imply that the assessing officer must necessarily, in all cases of default, irrespective of all other attending facts and circumstances obliged to impose penalty. To accept such an interpretation, besides doing violence to the plain language of the sub-section would otherwise discourage a bona fide assessee from rectifying his own default, especially in cases where the revenue may not be even aware of the default or its cure on self-act of the assessee as in the instant case.
On the question of interpretation, the imposition of penalty under section 34(8) of the Act as also quantification of the penalty amount (where that penalty may be found imposable), is found to be directory and not mandatory. Only the enforcement of the penalty order is found to be mandatory.
In the present case, undisputedly the assessee rectified the default committed by it (during A.Y. 2010-11) together with interest before the end of the calendar year 2011 i.e. during A.Y. 2011-12. The revenue on the other hand did not realize the existence of that default or its rectification made by the assessee, till as late as 09.09.2014. This undisputed fact mitigates against the levy of penalty as the assessee was not caught having committed the default and it had made good the loss to the revenue before issuance of any notice of demand with respect to the defaulted amount etc. - There survived no further legal justification to penalize such an assessee.
Revision allowed - decided in favor of the assessee and against the revenue.
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2018 (12) TMI 1 - ALLAHABAD HIGH COURT
Exemption from payment of tax - Cotton Fabrics - stock transfer - Section 9(2) read with Section 30 of the Central Sales tax Act - Held that:- The finding recorded by the assessing authority confined by the first appellate authority as well as Tribunal are finding of facts, need no interference by this Court.
No question of law is involved and therefore the questions of law referred by the assessee and decided against the assessee - The autorities below including the Tribunal have arrived at the conclusion that it is not the stock transfer but is a sale against the orders which are received by the revisionist from the buyers in advance.
No question of law arises in all the four revision petitions related to Central Sales Tax Act, accordingly the same are dismissed - petition dismissed.
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2018 (11) TMI 1945 - SC ORDER
Suo-moto revision - Reopening of assessment - reopening of assessment on the ground of short levy of Tax on Aluminium Composite Panel, which was liable to be taxed under residuary entry @ 12.5% - it was held by HC GOLDIE GLASS INDUSTRIES VERSUS STATE OF M.P. AND OTHERS [2017 (8) TMI 1451 - MADHYA PRADESH HIGH COURT] that the order passed by the Dy. Commissioner of Commercial Tax (Appeal) is final and is not amenable to suo-motu revisional powers conferred by Section 47 of the Act.
HELD THAT:- Sole respondent has not filed counter affidavit, despite last opportunity having been granted. Further opportunity is declined.
Registry to process the matters for listing before the Hon'ble Court after completion of period of four weeks whether counter affidavit is filed or not as further opportunity stands declined.
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2018 (11) TMI 1912 - DELHI HIGH COURT
Lack of jurisdiction of the Assessing Officer in exceeding the remand - adjudication of the case further - service of notice on the Special Commissioner on 03.08.2018 - OHA could have validly decided the appeal on or before 18.08.2018 - HELD THAT:- This Court is of the opinion that the reasons adduced by the Special Commissioner in the circumstances of the case are persuasive and reasonable given that at the stage when the OHA received the notice, he does not appear to have been delegated with the powers under Section 68 of the DVAT Act. However, on the merits of the impugned order, the court is of the opinion that the Special Commissioner has not applied her mind to the limited scope of the remand which the first OHA order had required.
The Special Commissioner is directed to decide the issue as expeditiously as possible having regard to the scope of the remand, made by the order of 13.11.2013, by the Special Commissioner while deciding the objection in the first instance against the first assessment order.
Petition allowed in part.
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2018 (11) TMI 1875 - MADRAS HIGH COURT
Reopening of concluded assessment - short submission of petitioner is that this communication cannot be called as a SCN in terms of the proviso to Section 27(2) of TNVAT Act - HELD THAT:- Any show cause notice should be precise in the formulation of its tentative conclusions. In this case, the said communication dated 12.12.2017 called upon the petitioner to make available a set of documents. Therefore such a communication can only be characterized as a notice in terms of Section 63 of the TNVAT Act. Any Assessing Authority is empowered to call upon the assessee to produce the accounts and other relevant documents - It is true that the petitioner was given an opportunity of personal hearing on 18.12.2017. But then, such an personal hearing will have to be granted after issuing a show cause notice.
It is concluded that the communication dated 12.12.2017 is not a show cause notice at all. It is only a communication under Section 63 of the Act.
The order impugned will have to be set aside on the short ground that the show cause notice as contemplated under Section 27(2) of the Act, was not issued. Therefore, the order impugned in this writ petition is set aside - matter is remitted to the file of the respondent who shall issue a proper show cause notice and after affording an opportunity of personal hearing to the petitioner herein pass order in accordance with law.
Petition allowed by way of remand.
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2018 (11) TMI 1838 - MADRAS HIGH COURT
Levy of penalty without properly considering the provisions of Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 - no tax due at all on the turnover estimated as sales suppressions at the time of passing the revised order - HELD THAT:- As per the section contemplates levy of penalty only on the tax due on the turnover that was willfully not disclosed.
Admittedly, in the instant case, the dealer had paid the tax at the time of inspection, which was done in the business premises of the dealer on 09.3.2011. The revision of assessment took place much after that and was concluded by the revised order dated 14.8.2012. Since the dealer paid tax even much prior to initiation of revision proceedings, the question would be as to whether the dealer can be directed to pay penalty under Section 27(3) of the Act - In the instant case, the dealer paid the entire tax much prior to the issuance of the revision notice i.e even at the time of inspection.
The dealer, having paid the tax much prior to initiation of revision proceedings, cannot be mulcted with penalty - revision allowed.
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