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2021 (2) TMI 498 - HC - VAT and Sales TaxLevy of penalty under Section 27(3)/27(4) of TNVAT Act - whether the First Appellate Authority could have admitted documents for the first time and as to whether there was an embargo under Section 63 of the Act? - HELD THAT:- The finding recorded by the Tribunal that the documents could not be taken into consideration at the appellate stage is unsustainable. On facts, we find that the documents were not admitted by the First Appellate Authority for the first time, but the documents were already available on record. Upon perusal of the said documents, the First Appellate Authority found that the receipts did not relate to any sale. Therefore, the Tribunal did not go into the factual position to ascertain as to whether the First Appellate Authority admitted fresh documents or were the documents available on record even when the assessment was completed. This aspect has been clearly brought out by the First Appellate Authority in his orders dated 31.12.2014, which aspect has not been examined by the Tribunal. Hence, on the said score also, the petitioner - assessee is bound to succeed. Levy of penalty under Section 27(3) and (4) of the Act - HELD THAT:- The levy of penalty under Section 27(3) of the Act arises for all the five years. However, the levy of penalty under Section 27(4) of the Act arises for the assessment years 2009-10 and 2010-11 alone. No specific ground was raised as to how the penalty was imposable. The First Appellate Authority granted relief to the assessee by setting aside the penalty, which was levied by the Assessing Officer. In doing so, the First Appellate Authority referred to Section 27(2) of the Act and held that the levy of penalty was provided under the said provision on the actual availing of input tax more than admissible input tax and found that the petitioner – assessee reversed the input tax, which was availed owing to Section 19(20) of the Act much before finalization of the assessment. Therefore, the First Appellate Authority held that there was no excess availing of input tax and also reversal of input tax was not detected and not based on any suppression of fact or bogus claim - Ultimately, the penalty levied under Section 27(3)/27(4) of the Act was set aside. The Tribunal did not assign any reasons as to why the finding written by the First Appellate Authority setting aside the penalty was not justified. The Tribunal proceeded on the basis that during the VAT Audit, the assessment came to light and therefore, the willfulness on the part of the assessee was established. Any alleged admission before the Inspecting Authority cannot be put against the assessee because the Assessing Officer is an independent Authority, who will deal with the matter upon receipt of the report from the Inspecting Wing. Hence, it hardly matters as to what stand was taken by the assessee when the inspection was conducted. Accordingly, so far as the levy of penalty under Section 27(4) of the Act for the assessment year 2009-10 is concerned, the same cannot be sustained. The question, which arose for consideration namely as to whether Section 63 of the Act contemplates a total embargo on the First Appellate Authority or the Tribunal to admit documents is answered in favour of the petitioner/assessee - The other questions, which have been raised, are all factual in nature and as we have upheld the orders passed by the First Appellate Authority deleting penalty under Section 27(3)/27(4) of the Act as well as equal time addition, those questions do not arise for consideration. Revision allowed.
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