TMI Blog2011 (2) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... as made by SHANTANU KEMKAR J. The petitioner M/s. Ind Exports Limited, a company incorporated under the Indian Companies Act, 1956, having its registered office at Mumbai and depot at Indore, claiming to be a registered dealer under the provisions of the Madhya Pradesh Commercial Tax Act, 1994 (for short, the Act of 1994 ) has filed this writ petition challenging the order dated January 18, 2003 (annexure P2) passed by the Assistant Commissioner, Commercial Tax Division II, Indore, as also the order dated July 29, 2003 (annexure P4) passed in Revision No. 44 of 2003 by the Additional Commissioner, Commercial Tax, Indore. Brief facts of the case are that the petitioner-company dealing in various items also dealt in the edible oil for the relevant year April 1, 1999 to March 31, 2000. The petitioner had filed its quarterly returns in respect of the State sales tax as also the entry tax and had deposited the taxes on the basis of such returns. It is the case of the petitioner that its entire turnover of sales of all items including edible oil was duly and correctly disclosed in the return. However, on the basis of wrong impression, the rate of tax on edible oil was shown as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities without fulfilment of the conditions precedent for imposing penalty. It is the case of the petitioner that deposit of tax at a lower rate without any dishonest intention does not amount to concealment and no penalty could have been imposed. It is the case of the petitioner that two per cent rate of tax on edible oil was prevalent since April 1, 1995. It was changed to four per cent by mere change of rate in entry from May 1, 1999. However, the petitioner under a bona fide wrong impression that the same is two per cent continued to collect and deposit the tax at two per cent. It is only when the entire Schedule II was substituted by new Schedule II, the petitioner got knowledge of increase in the rate. Thus, according to the petitioner under bona fide mistake it had collected and paid the tax at the rate of two per cent and there was no concealment of the turnover or furnishing of false particulars of the turnover or furnishing of a false return so as to make it liable for penalty. On the other hand, the respondents have supported the impugned orders and have contended that the petitioner's contention that the commercial tax at the rate of two per cent was deposited und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commercial Tax Act which reads thus: 69. Power of Commissioner or appellate or revisional authority to impose penalty in certain circumstances. (1) If the Commissioner or the appellate or revisional authority, in the course of any proceedings under this Act is satisfied that a dealer has concealed his turnover or the aggregate amount of purchase prices in respect of any goods or has furnished false particulars of his sales or purchases, as the case may be, in his return or returns for any year or part thereof or has furnished a false return or returns for such period, the Commissioner or the appellate or the revisional authority as the case may be, may initiate proceeding separately for imposition of penalty under this section. (2) The proceeding under sub-section (1) shall be initiated by the Commissioner or the appellate or revisional authority as the case may be, by issue of a notice in the prescribed form for giving the dealer an opportunity of being heard. On hearing the dealer, the Commissioner or the appellate or the revisional authority, as the case may be, shall pass an order not later than one calendar year from the date of initiation of such proceeding or with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though the petitioner recovered and paid the tax at the rate of two per cent but when the additional demand of Rs. 10,48,301 was raised, the same was deposited. It is now well-settled that the order imposing penalty for failure to carry out a statutory obligation 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. When the facts are fully disclosed in a return and are not misstated, the raising of a legal plea of exemption cannot make the return a false return within the meaning of section 69 unless there is an element of deliberateness in it. Where the assessee does not include a particular item in the taxable turnover under a bona fide belief that 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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