TMI Blog2008 (8) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, 2006 and January 29, 2007 are set aside. In the result, the penalty imposed under section 56 of the Punjab VAT Act and the additional demand are set aside. - VAT Appeal No. 10 of 2007 - - - Dated:- 25-8-2008 - ADARSH KUMAR GOEL AND AJAY TEWARI , JJ. The judgment of the court was delivered by AJAY TEWARI J. The present appeal has been filed on the following question of law: 2. Whether order of learned Tribunal upholding the levy of penalty under section 56 of the Punjab VAT Act, 2005 is sustainable in the eyes of law, when the assessee has not actually availed of the said benefit, no demand is due from assessee on that account and there can be no mens rea in the circumstances of the case? By order dated July 4, 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these accounts alone, the appellant was not liable to pay any tax, as the credit in its account was more than the tax payable. However, while filing return, the appellant claimed the aforementioned credit of Rs. 55,368 in one instalment in the second quarter. When this fact came to the notice of respondent No. 3, he passed the order of imposition of penalty and additional demand on July 4, 2006. As mentioned above, both the appeals filed by the appellant were dismissed. Shri K.L. Goel, learned counsel for the appellant, has urged that claiming of the credit at one go could only be a mistake, since neither the appellant got any gain therefrom nor was there any loss occasioned to the Revenue on this account, because, as mentioned above, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lure 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 bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out. Simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner prescribed by the statute. . .' It is elementary that section 43 of the Madhya Pradesh General Sales Tax Act, 1958, providing for imposition of penalty is penal in character and unless the filing of an inaccurate return is accompanied by a guilty mind, the section cannot be invoked for imposing penalty. If the view canvassed on behalf of the Revenue was accepted, the result would be that even if the assessee raises a bona fide contention that a particular item is not liable to be included in the taxable turnover, he would have to show it as forming part of the taxable turnover in his return and pay tax upon it on pain of being held liable for penalty in case his contention is ultimately found by the court to be not acceptable. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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