TMI Blog2013 (3) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... gation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. To make the assessee liable for penalty fallacy should be in the disclosure of the facts required to be stated in the return. On perusal of the provisions of Section 69 and 26 of the M.P.C.T.Act it is clear that in Section 69, the liability for imposition of penalty arises on account of less payment of tax that also below 80%, when it was known fully well that it was their liability to pay full tax, whereas in the case of Section 26, the liability to pay penalty at the time of filing of the return and payment of tax, at that time of filing of the return, when tax is paid simultaneously. Both these situations are different and deals with the different situation. However, even otherwise fiscal statutes are to be construed strictly and on their plain reading reference can be made to a judgment of in the case of Catholic Syrian Bank Limited Vs.Commissioner of Income Tax, Thrissur(2012 (2) TMI 262 - SUPREME COURT OF I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Returns- [(1) (i) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner; and (ii) Every registered dealer; and (iii) Every dealer whose registration certificate has been cancelled under clause (d) or (e) of sub-section (9) of Section 22, shall furnish return in such form, in such manner, for such period, by such dates and to such authority as may be prescribed : Provided that the Commissioner may, subject to such terms and conditions as may be prescribed, exempt any such dealer from furnishing such returns or permit any such dealer to furnish them for such different period, in such other form and to such other authority, as he may direct.] [(2) Every dealer required to file return under sub-section (1) shall pay the full amount of tax payable according to the return as required by sub-section (2) of Section 32 or the difference of the amount of tax payable according to the revised return as required by sub-section (3) of the said Section and the full amount of interest, if any, payable under clause (a) or clause (b) of sub-section (4) and shall furnish the proof of such payment along with the return under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the figure that was extracted from the books of account is adopted and considered by the assessing authority for the purpose of assessment. 5. However, the Assessing Officer did not agree with the contentions of the petitioner and passed an order against the petitioner, who stopped appearing during the course of proceedings. Penalty was imposed upon the petitioner on the ground of deemed concealment due to deposit of tax less than 80% of the tax payable. The assessment order so passed is Annexure P-3. 6. The petitioner aggrieved of the order of Assessing Officer filed a revision petition before the revisional authority vide Annexure P-4. The revisional authority finding that assessment though was made on the basis of books of accounts of the petitioner after observing that the petitioner has not concealed his turnover, confirmed the imposition of penalty on the ground of short deposit of tax. Non-deposit of full tax was treated as negligence on the part of the petitioner. According to the revisional authority, the petitioner ought to have filed revised return and deposited the tax. 7. A perusal of the aforesaid order of the revisional authority shows that the order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the amount of tax evaded. Hence if there is no concealment of turnover or furnishing of inaccurate particulars of sales or purchases or there is no filing of false returns, no proceedings u/s 69 can be initiated. V. That so far as the non payment or short payment of tax is concerned the Act provides for levy of penal interest u/s26(4)(a). VI. That in the instant case the revisional authority has recorded a specific finding that the AO has assessed the turnover as per petitioner's books of accounts, as such, it is clear that the dealer has not concealed any turnover. However, the revisional authority confirmed the imposition of penalty only on the ground of non deposit of tax. It may further be relevant to not that the AO has already levied interest u/s 26(4) (a) of the Act in his order dated 11/12/2000 but initiated proceedings u/s 69 by invoking section 69(3) and ultimately imposed penalty for short deposit of tax by Annexure P/3. VII. That the provisions of section 43 of MPGST Act which are in parimateria with section 69(3) of the MPCT Act have been interpreted by Division Bench of this Hon'ble court in Case of Food Corporation of India Vs.CST reported in 81 STC 219- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based upon wrong calculation. 13. Another judgment relied upon by the petitioner is the decision of the Apex Court delivered in the case of Hindustan Steel Limited Vs. State of Orissa reported in 25 STC 211. In that case it was held as under:- An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in the case of IND Exports Limited Vs. Assistant Commissioner of Commercial Tax and others reported in (2011) 43 VST 450 (MP). In that case, Division Bench of this Court set aside the imposition of penalty imposed under MP Commercial Tax Act, 1994 as also the entry tax and on the basis of return filed by the assessee wherein, it was claimed that the entire turn over of sales of items including edible oil was duly disclosed but mistakenly the rate of tax on edible oil was 14 shown as 2% in place of 4%. The assessment was completed on the basis of the disclosures made in the return raising an additional demand on account of variance in the rate of edible oil from 2% to 4%. 19. In that case, Division Bench of this Court has opined that in in the peculiar facts of that case it could not have been said that assessee concealed his turn over or filed a false return. In that case, petitioners have been shown rate of tax to be paid 2% in place of 4% in its return was not taken as will full in non filing of the due return and it was opined that in that case there was no deliberate or dis-honest disclosure of the turn over correctly and therefore, it was held that in that case it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he is not liable so to include it, it would not be right to condemn the return as a false return inviting imposition of penalty. The concealment of turnover and furnishing of a false return, to fall within the ambit of this section must be accompanied with mens rea . If the assessee had a bona fide doubt whether the particular item is taxable or not and for the reason if he did not show the purchases in the return, it cannot be said that there was any mens rea . The expressions concealment of turnover , furnished false particulars of sales or purchase and furnished false returns used in Section 69 (1) clearly shows that the element of mens rea is a necessary component. In order to expose the assessee to penalty, unless the case is strictly covered under the provision of penalty, the same can not be invoked. [See Hindustan Steel Ltd. vs. The State of Orissa (25 STC 211), Dadabhoy's New Chirimiri Ponri Hill Colliery Company Private Ltd. vs. Commissioner of Sales Tax, M.P. (44 STC 100), The Cement Marketing Co. of India Ltd. vs. The Assistant Commissioner of Sales Tax, Indore and others (45 STC 197), Govindram Chatramal vs. Commissioner of Sales Tax, Madhya Pradesh (55 STC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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