9911796707
Advanced Search 
TMI Blog2008 (11) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... account, register or document maintained in the course of business of the petitioner. The petitioner was served with a notice dated February 2, 2008 under section 73(10) of the OVAT Act to show cause by February 8, 2008 as to why penalty equal to five times of the tax leviable or 20 per cent of the value of the goods, whichever is higher, may not be levied on the petitioner for keeping goods worth Rs. 1.75 lakh which were not accounted for in the books of account, register or document maintained in course of business by the petitioner. However, before filing of reply to the show cause, on February 4, 2008 opposite party No. 1 collected tax and penalty amounting to Rs. 45,500 from the petitioner vide receipt No. 062913. Hence, this petition. Mr. B. Panda, learned counsel for the petitioner, submitted that the opposite parties have collected the amount of tax and penalty amounting to Rs. 45,500 under the OVAT Act and OET Act without passing any specific order and without affording any opportunity of hearing to the petitioner before collecting such tax and penalty. No basis or reason has been assigned for estimating the value of goods at Rs. 1.75 lakhs. Though showcause notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35,000 under section 73(10) of the OVAT Act and Rs. 7,000 under the OVAT Act without passing any speaking order for imposing such penalty? (iii) Whether, on the facts and circumstances of the case, the assessing officer is justified in collecting entry tax amounting to Rs. 3,500 without giving any opportunity of hearing to the petitioner and passing any order for levying such tax? In order to resolve the rival contentions it is necessary to quote section 73(10) of the OVAT Act and relevant portions of section 3 of the OET Act, which are as follows: "73(10). The officer referred to in sub-section (8) may, after giving the dealer an opportunity of being heard and after holding such further enquiry as he may consider necessary, impose on him for the possession of goods not accounted for, whether seized or not under sub-section (8), a penalty equal to five times of the tax leviable or twenty per cent of the value of such goods, whichever is higher, and such officer may release the goods, if seized, on payment of the penalty imposed. 3.. Levy of tax.-(1) There shall be levied and collected a tax on entry of the Scheduled goods into a local area for consumption, use or sale th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated February 2, 2008 to the petitioner to show cause by February 8, 2008 as to why penalty as provided under section 73(10) of the OVAT Act shall not be levied on the petitioner, as on inspection it was found that excess stock in question was kept by the petitioner without any proper document in contravention of section 73(2) and 76(2) of the OVAT Act. But before any such explanation was filed by the petitioner and without waiting till February 8, 2008, the date fixed for filing a reply to the show-cause notice, opposite party No. 1 collected penalty amounting to Rs. 35,000 under the OVAT Act. No opportunity of hearing was also afforded to the petitioner as provided under section 73(10) of the OVAT Act before collecting such penalty. This collection of Rs. 35,000 towards penalty amounts to gross violation of the statutory provisions contained in section 73(10) of the OVAT Act. Penalty of Rs. 7,000 has been imposed under the OET Act without mentioning any provisions of the Act under which such a penalty has been imposed. Before imposing penalty of Rs. 7,000 under OET Act neither any show-cause notice was issued nor any opportunity of hearing was afforded to the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assessing officer must record his finding that the person concerned has knowingly violated any specific statutory provision. A situation may arise that a particular person may fail to discharge his statutory obligation without any mala fide intention. In such a situation even if the statute provides for imposition of penalty, the revenue authority may not impose any penalty if he finds that the concerned person has acted in honest and genuine belief that his action does not amount to infringement of any statutory provision. The honourable Supreme Court in Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211, held that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 73(10) of the OVAT Act and OET Act without conducting any further enquiry and passing any speaking order for imposing such penalty. So far as the third question is concerned, admittedly the opposite party No. 1 has neither given any opportunity of hearing to the petitioner nor has he passed any speaking order before collecting entry tax on the estimated value of the goods. The learned counsel for the petitioner has also not brought to the notice of this court as to how the alleged unaccountedfor goods were valued at Rs. 1.75 lakh. Under section 3 of the OET Act entry tax shall be levied and collected on entry of the Schedule goods into the local area for consumption, use or sale therein. The opposite party No. 1 has never established that goods (kids and ladies wears) worth Rs. 1.75 lakh found on the date of inspection and alleged to be unaccounted for were brought from outside the local area by the petitioner. There is no finding as to whether the Scheduled goods in question are manufactured in the local area or not, and, if brought from outside the local area, whether any opportunity was given to the petitioner to prove that such goods were already subjected to tax or ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
