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2018 (3) TMI 977 - HC - VAT and Sales TaxPenalty u/s 40(2) of the TNVAT Act - TDS amount recovered and remitted by the contractee - adjustment of TDS towards penalty - Held that: - when the assessment proceedings were made, the petitioner was able to convince that the Assessing Officer by records that the transaction done by the petitioner is entitled for exemption which plea was accepted and assessment was completed. Therefore, the respondent could not have levied penalty at the first instance and could not have adjusted the tax which was deducted at source by the contractee and remitted to the respondent towards the petitioner's account - In fact, the respondent should have refunded the amount to the petitioner as a consequence of holding that the petitioner is eligible for exemption of the contract receipt. The levy of penalty and the adjustment of TDS towards the said penalty is illegal - petition allowed - decided in favor of petitioner.
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